ARTICLE · 07 MARCH 2018

Swiss Safe Harbour Interest Rates On Intra Group Loans For 2018

MLL Meyerlustenberger Lachenal Froriep Ltd

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Interest rates on intra group loans are a recurring topic. The Swiss Federal Tax Administration (FTA) publishes safe harbour interest rates on an annual basis in advance.

SwitzerlandTax

Interest rates on intra group loans are a recurring topic. The Swiss Federal Tax Administration (FTA) publishes safe harbour interest rates on an annual basis in advance. Their application will usually prevent unwelcome surprises. But there is more to be considered.

Annual guidance published by the FTA

In its annually published advance guidance on intra group interest rates the FTA differentiates whether the Swiss company acts as creditor or debtor, what currency the loan was granted in and whether (real estate) security was provided. Excessive or insufficient interest rates may trigger tax consequences in particular for corporate income and withholding tax purposes (WHT).

If the safe harbour rates are met, FTA assumes that the rates are at arm's length without further proof required. Where a Swiss company however applies higher or lower interest rates, it should be able to prove that they are at arm's length.

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