2025 Safe Harbour Interest Rates
The Swiss Federal Tax Administration (SFTA) has published its updated 2025 circulars outlining safe harbour interest rates for shareholder and intercompany loans. These rates provide taxpayers with a benchmark for compliance under Swiss tax law, ensuring transparency and regulatory alignment.
With increasing scrutiny on intra-group financing, these benchmarks offer clarity for domestic transactions while emphasizing the need for caution in international dealings. Below is an overview of the key rates and their implications.
Swiss Franc Loans: Safe Harbour Rules and Calculations
The 2025 safe harbour interest rates for Swiss franc loans have been adjusted to reflect updated benchmarks. These rates differentiate between loans to and loans from shareholders and related parties and are designed to reflect market conditions while maintaining compliance with the arm’s length principle.
Loans to Shareholders and Related Parties
– Loans financed through equity: A minimum interest rate of 1% applies in 2025 (previously 1.5% in 2024).
– Loans financed through debt: The interest rate must reflect self-cost plus a margin of 0.5% for loans up to CHF 10 million, with a minimum rate of 1% in 2025 (previously 1.5%). For loans exceeding CHF 10 million, the applicable margin for debt financing decreases to 0.25%.
Loans from Shareholders and Related Parties
For loans received from shareholders and related parties, the applicable maximum rates depend on the size and type of loan:
Operating Loans
– Up to CHF 1 million:
– Trading & manufacturing companies: 3.5% (previously 3.75% in 2024).
– Holding & asset management companies: 3% (previously 3.25% in 2024).
– Above CHF 1 million:
– Trading & manufacturing companies: 1.75% (previously 2% in 2024).
– Holding & asset management companies: 1.5% (previously 1.75% in 2024).
Real Estate Loans
Safe harbour rates also apply to loans secured by real estate, depending on the type and purpose of the property:
– Residential and agricultural properties:
– Up to two-thirds of market value: 1.25% (previously 2.25% in 2024).
– Remaining credit amounts: 2.0% (previously 3% in 2024).
– Commercial and industrial real estate:
– Up to two-thirds of market value: 1.75% (previously 2.75% in 2024).
– Remaining credit amounts: 2.5% (previously 3.5% in 2024).
Foreign Currency Loans: 2025 Benchmarks
The 2025 foreign currency safe harbour interest rates have also been updated to reflect global market conditions.
Notably, the interest rate for Polish Zloty (PLN) has increased from 4.75% in 2024 to 5.5% in 2025, reflecting evolving economic conditions in the region.
| Currency | 2024 Rate | 2025 Rate | Change |
| USD | 4.25% | 4.25% | – |
| EUR | 2.5% | 2.5% | – |
| PLN | 4.75% | 5.5% | +0.75% |
| GBP | 3.75% | 4.5% | +0.75% |
| HKD | 3.0% | 3.5% | +0.5% |
| JPY | 0.5% | 1.25% | +0.75% |
| CNY | 3.0% | 2.0% | −1% |
| BRL | 10.25% | 15.5% | +5.25% |
Implications of Safe Harbour Rates
These safe harbour rates apply within Switzerland and should not automatically be considered as safe benchmarks for cross-border transactions. Companies operating internationally must ensure compliance with both Swiss and foreign transfer pricing rules.
Key Considerations for Taxpayers
– Simplified Compliance: Using safe harbour rates minimizes disputes with tax authorities.
– Flexibility: Taxpayers can deviate from these rates if they can substantiate the applied rates with documentation (e.g., transfer pricing studies).
– Protection Against Reclassification: Applying these rates helps avoid reclassification of loans as hidden equity or profit distributions, preventing adverse tax consequences.
– Ease of Audits: Adhering to safe harbour rates reduces scrutiny during tax audits.
Tax Risks of Non-Compliance
Failure to comply with these principles may lead to:
– Swiss withholding tax at 35% (or 54% grossed up), if interest rates are deemed excessive.
– Reclassification as hidden equity, leading to non-deductibility of interest payments.
– Interest barrier rules in foreign jurisdictions, limiting deductible interest expenses.
Next Steps for Businesses
To ensure compliance with the 2025 guidelines, companies should:
- Review shareholder and intracompany loan agreements.
- Align loan terms with 2025 safe harbour rates.
- Maintain proper documentation and transfer pricing studies.
- Monitor regulatory changes affecting intra-group financing.
For more details, refer to the official circulars on intra-company loans in foreign currency and intra-company loans in CHF, available on the Swiss Federal Tax Administration website.
Intra-company loans in foreign currency
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