Analysis by Tax Partner AG
The Swiss Federal Tax Administration (FTA) has recently released a circular on interest rates for loans recognised for tax purposes in 2024, applying to both Swiss francs and foreign currencies. The information provides minimum and maximum interest rates for different financing situations and are widely accepted by Swiss tax authorities.
If taxpayers are unable to prove that their rates align with third-party standards, they might face risks like hidden profit distribution or capital contribution. To prevent any negative tax consequences, it’s crucial for taxpayers to ensure that their interest rates comply with the safe haven rates.
If adjustments are necessary, they should be agreed upon in the loan contract. These FTA guidelines specifically apply to long-term loans, for short-term loans, individual third-party comparisons are necessary.
Monika Bieri and Patrick Bieri from Tax Partner AG analyse this circular and it’s wider implications here.
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