February 1 2019
On 1 February 2019, the Federal Tax Administration published circulars announcing the safe haven interest rates applicable to shareholder and related party loans.
Circular of 31 January 2019: loans denominated in CHFThe minimum interest rates for loans in CHF granted to shareholders or related parties are:
- on loans financed through equity: 0.25%; and
- on loans financed through debt: the interest incurred (prime costs) plus 0.5% on amounts up to CHF 10 million, or plus 0.25% on amounts exceeding CHF 10 million; in all cases, however, the percentage involved is at least 0.25%.
- on real estate loans: 1.0% to 2.25% (depending on loan type and level of debt financing); and
- operational loans received by a Swiss trading or production company: 3.0% for loans up to CHF 1 million and 1.0% on the excess; by a Swiss holding or administration company: 2.5% for loans up to CHF 1 million and 0.75% on the excess.
Circular of 1 February 2019: loans denominated in foreign currenciesFor loans in foreign currencies (e.g. EUR and USD) granted to shareholders or related parties, the minimum interest rates are:
- on loans financed through equity: EUR: 0.75%, USD: 3.0%; in all cases, however, at least the safe haven interest rate for loans denominated in CHF, i.e. 0.25%, applies; and
- loans financed through debt: the interest incurred (prime costs) plus 0.5%; in all cases, however, at least 0.75% for loans denominated in EUR, or 3.0% for loans in USD.