Swiss safe harbour intercompany interest rates for 2023 announced - Tax and Legal blog


On 7 and 8 February 2023, the Swiss Federal Tax Administration (“SFTA”) published the Swiss safe harbour interest rates applicable for the year 2023, both for intercompany (“IC”) loans and advances denominated in Swiss francs (Circular Letter No. 203) as well as in foreign currencies (Circular Letter No. 204). These rates are used by the SFTA to determine the arm’s length nature of interest on intragroup loan receivables or payables and provide a level of tax certainty from a Swiss tax perspective, in absence of a bespoke arm’s length comparability analysis.

The safe harbour interest rates for 2023 apply retroactively as of 1 January 2023.

2023 Safe harbour interest rates for Swiss franc (CHF) IC loans and advances

The 2023 minimum interest rates on CHF-denominated loans granted by a Swiss resident company to a shareholder or related party generally are as follows below:


This indicates an increase in the CHF minimum lending rate from 0.25% for 2022 to 1.5% for 2023.

For loans denominated in Swiss Francs, received from shareholders and affiliated parties, the maximum interest rates payable by Swiss entities are calculated based on the minimum lending rate in CHF increased by a specific spread, as follows:


It should also be noted that different interest rates apply to real estate loans.

2023 Safe harbour interest rates for IC loans and advances in foreign currencies

The table below shows the safe harbour interest rates by currency, applicable for 2018 to 2023. We note that for 2023 we can see significant rate “hikes” across the board for all foreign currencies.


The interest rates depicted in the table above apply to advances and IC loan receivables which are equity-financed. For debt-financed receivables, the respective third-party or related party debt financing costs (%) plus a margin of 0.50% applies, at least however the interest rate shown in the table applies. However, if the CHF safe harbour rate is higher (i.e.1.5% for 2023), then this higher rate has to be charged.

For the determination of the maximum interest rate for IC loan payables under the safe harbour rules, a spread is to be added to the interest rates depicted in the table. The spread is stipulated by reference to the Operating loans under paragraph 2.2 of the Circular No. 203. Therefore, for operating loans up to the equivalent of CHF 1 million or less., the spread amounts to 2.25% in case of trading and manufacturing companies as borrowers, and to 1.75% for holding and asset management companies as borrowers. For advances and IC loans exceeding the equivalent of CHF 1 million, the applicable spread is 0.75% and 0.50% respectively.

Deloitte perspective – implications and recommendations

Our key observation from the latest Circular letters is that the 2023 Swiss safe harbour interest rates have been significantly increased in an effort to reflect the recent market interest rate developments driven by a rapid shift by major central banks from monetary easing to monetary tightening in response to rising inflationary pressures.  

Given that the increased volatility in the markets is expected to persist throughout 2023, there may be growing differences between the Swiss safe harbour interest rates and the external debt financing costs at which multinational companies are able to finance their operations. This may put pressure on multinational companies which are relying on safe harbour rates to defend their position in Switzerland. The application of such rates can also have an impact on the transfer pricing consideration of other jurisdictions party to the transfer pricing arrangements.

In this regard, we would like to note that a taxpayer can apply an interest rate that deviates from the published safe harbour rates. However, for such an interest rate to be acceptable by the Swiss tax authorities, the taxpayer would have to demonstrate that the interest rate applied meets the arm’s length standard. In practice, this would require performing appropriate transfer pricing analyses of comparable third-party arrangements in line with the latest requirements of Chapter 10 of the OECD Transfer Pricing Guidelines.

Non-compliance with the arm’s length principle can lead to negative tax consequences in Switzerland, such as recharacterization of the interest as a hidden profit distribution subject to Swiss withholding tax at a rate of 35% (grossed up to 53.8% if not borne by the recipient) and its add-back to taxable income.

Lastly, the Swiss Supreme Court recently decided a case in the canton of Geneva that will shed some light on the documentation requirements as well as requirements on arm’s length comparability analysis. We are in the process of analysing the decision and will discuss this in more detail in our next blog shortly.

If you would like to discuss any aspect of transfer pricing for loans or other types of financial transactions such as guarantees, cash pooling, hedging or captive insurance, please reach out to our Transfer Pricing experts at Deloitte. See contacts below.

Key contacts

Georgy Galumov_blog

George Galumov - Partner, Deloitte EMEA Transfer Pricing Financial Transactions Leader

George is a Partner with more than 15 years of experience covering tax and transfer pricing aspects of various intra-group transactions. This includes business model and transaction flow design, M&A activity, as well as mainstream transfer pricing documentation and planning engagements. George has worked with a number of leading multinational corporations including FTSE 100 companies, leading energy and resources businesses, financial services institutions and private equity owned businesses.

George has an MSc in Energy Trade and Finance from Cass Business School and is a holder of the Chartered Financial Analyst (CFA) designation.


Martin Krivinskas_picture new_110x110

Martin Krivinskas -  Partner, Transfer Pricing 

Martin is an international tax partner with 20 years experience working on international tax matters. He has worked extensively with global multinationals, with a particular focus on helping international group’s mitigate tax risk and manage their effective tax rates. Martin has significant experience of supporting clients with a wide range of transfer pricing and international tax matters and is part of Deloitte` s Global Value Chain Alignment leadership team. Martin`s clients are predominantly in the life sciences, industrial products and consumer products industries.

Martin is a Chartered Accountant and a member of the Chartered Institute of Taxation


Salim Damji_2

Salim Damji - Partner, Transfer Pricing 

Salim is a Tax Partner with more than 20 years of experience in transfer pricing and business model optimisation. He has worked in a variety of countries including the UK, Switzerland, and the US.

Salim has worked with a number of multi-national groups assisting them in their transfer pricing audits, documentation, and planning issues. Salim’s main focus over the past few years has been intellectual property planning, business restructuring, and APAs. Salim has been continuously named as one of the world’s leading transfer pricing advisors since 2005 in different journals. He holds Masters degrees from Oxford and Southampton Universities.



Markus Reese - Director, Transfer Pricing and M&A

Markus is as a Director in Deloitte Tax & Legal (Transfer Pricing and M&A) and has been with the firm since 11/2010. Before joining Deloitte Switzerland he worked with another German based Big4 for for 4.5 years in their Duesseldorf office. Currently, Markus is engaged in Transfer Pricing engagements (TP planning, documentation, audit defense, IP planning, value chain (re-)design and Business Model Optimisation). In addition to this his work involves support towards the M&A tax team dealing with buy-side and sell-side projects as it concerns transfer pricing and pre-/post-deal work.



Matej Herceg - Manager, Transfer Pricing 

Matej is a Manager in the Business Tax practice of Deloitte Switzerland. He has 9 years of experience in the fields of international taxation and transfer pricing, advising multinational clients across diverse industries including the industrial products, consumer business, life sciences, financial services and manufacturing. He has experience with design and implementation of TP structures, advance pricing agreements, global TP documentation projects, debt pricing, IP valuation, value chain analyses, permanent establishment risk assessments, substance reviews and M&A tax support.

Matej is a holder of the Chartered Financial Analyst (CFA) designation.



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