In the circular letters dated 29 January and 30 January 2024, the SFTA published the safe harbour interest rates applicable to shareholder and intercompany loans, denominated in Swiss Francs and foreign currencies, applicable for 2024. The Swiss Franc transaction safe harbour interest rates included in this year’s circular remain largely unchanged whilst most foreign currency transaction rates have decreased compared to the interest rates that were applicable for 2023.
Swiss taxpayers can deviate from these interest rates so long as they are able to demonstrate that the interest rates that they apply are in line with the arm’s length principle – in practice, this means that the interest rates must be supported by a transfer pricing study.
Swiss Franc transactions
1. For loans denominated in Swiss Francs, made to shareholders and affiliated parties, the interest rates that a Swiss resident shall receive at a minimum are as follows:
| Loans to related parties (in Swiss francs) | Interest rate |
| Loans financed through equity | 1.50% |
| Loans financed through debt: the actual interest incurred plus 0.50% on amounts up to CHF 10m, or plus 0.25% on amounts exceeding CHF 10m |
margin: 0.25% to 0.50% (Total minimum: 1.50%) |
The minimum interest rates for loans in Swiss Francs given by a Swiss resident company to a shareholder or related party in 2024 remain unchanged compared to 2023.
2. For loans denominated in Swiss Francs, received from shareholders and affiliated parties, the maximum interest rates payable by Swiss entities are as follows:
| Loans to related parties (in Swiss francs) | Interest rate | |
| Real estate loans | Housing and agriculture | Industry and commerce |
| Up to a loan in the amount of the first mortgage (i.e., 2/3 of the market value of the property) |
2.25% | 2.75% |
Remainder with the following maximum rates for debt financing:
|
3.00% | 3.50% |
| Operating loans | ||
| Swiss trading or production company for an operational loan: 3.75% on amounts up to CHF 1m, or 2.00% on amounts exceeding CHF 1m | 2.00% - 3.75% | |
| Swiss holding or asset administration company for an operational loan: 3.25% on amounts up to CHF 1m, or 1.75% on amounts exceeding CHF 1m |
1.75% - 3.25% | |
Foreign Currency transactions
The table below shows the safe harbour interest rates applicable for 2023 and 2024.
For loan receivables of a Swiss company, these are the minimum rates that must be charged to a related party (note: if the CHF safe harbour rate is higher, then this higher rate has to be charged). If a loan is debt financed, then a minimum spread of 0.50% has to be applied.
These interest rates are basically also the maximum interest rates that a Swiss entity can pay to a related party. However, for loans payables of a Swiss company, the difference between the CHF minimum and maximum interest rates can be added i.e., for operating loans of a trading company a spread of 2.25% (for loans up to CHF 1m) respectively of 0.50% (for loans exceeding CHF 1m).
| Country | Currency | 2023 | 2024 |
| European Union | EUR |
3.00 |
2.50 |
USA |
USD |
3.75 |
4.25 |
| Australia | AUD | 4.25 | 4.25 |
| Brazil | BRL | 12.75 | 10.25 |
| Canada | CAD | 3.75 | 3.50 |
| China | CNY | 3.00 | 3.00 |
| Czech Republic | CZK | 5.50 | 4.00 |
| Denmark | DKK | 3.25 | 3.00 |
| Hong Kong SAR | HKD | 4.25 | 3.00 |
| Hungary | HUF | 11.00 | 5.50 |
| India | INR | 7.00 | 7.00 |
| Israel | ILS | 3.25 | 3.75 |
| Japan | JPY | 0.50 | 0.50 |
| Malaysia | MYR | 3.75 | 3.75 |
| New Zealand | NZD | 4.75 | 4.50 |
| Norway | NOK | 3.50 | 3.50 |
| Poland | PLN | 7.00 | 4.75 |
| Romania | RON | n.a. | n.a. |
| Russia | RUB | n.a. | n.a. |
| Singapore | SGD | 4.00 | 3.00 |
| South Africa | ZAR | 8.75 | 8.25 |
| South Korea | KRW | 3.25 | 3.00 |
| Sweden | SEK | 3.25 | 2.75 |
| Thailand | THB | 3.00 | 2.75 |
| United Arab Emirates | AED | 4.00 | 4.25 |
| United Kingdom | GBP | 5.25 | 3.75 |
It is important to note that whilst the interest rates listed above are safe harbours from a Swiss perspective, if a transaction is between a Swiss company and a foreign counterparty, a transfer pricing study will need to be performed to demonstrate that the selected interest rates are at arm’s length.
Taxpayers should also be mindful that transactions between a Swiss company and an EU based counterparty that utilise the safe harbour rates will need to disclose the transaction in the counterparty location as part of the DAC 6 regime.
Transfer pricing is growing in importance for tax administrations in Switzerland. This is also evidenced by the detailed report issued by the SFTA on January 23, 2024. For insights on the recent report issued, refer to our blog post here.
Considering the emphasis put on transfer pricing worldwide it is imperative for businesses to maintain and apply policies that are compliant with transfer pricing rules both here in Switzerland and in other countries.
If you have any questions regarding transfer pricing or need any assistance, feel free to reach out to us.
Would you like to learn more about our transfer pricing services?
Our transfer pricing services
Contact us
David McDonald
Michalis Louca
Agoston Lorincz
Senior Manager, Transfer Pricing and Value Chain Transformation, PwC Switzerland
+41 58 792 46 09
Martina Walt
Gilia Brault
Senior Manager, Transfer Pricing and Value Chain Transformation, PwC Switzerland
+41 58 792 9690
Etienne Michaud
Senior Manager, Transfer Pricing and Value Chain Transformation, PwC Switzerland
+41 58 792 96 70
