AGN EMEA Tax Committee News
Introduction
Switzerland has released its Safe Harbour interest rates for 2025—benchmarks that significantly affect how multinational companies structure intra-group loans. While often overlooked due to their technical nature, these rates carry real weight for compliance, tax risk management, and treasury strategy. For finance professionals and tax advisors operating in or through Switzerland, staying informed isn’t optional—it’s essential.
What Are Switzerland’s Safe Harbour Rates—and Why Do They Matter?
Safe Harbour rates are annual reference interest rates published by the Swiss Federal Tax Administration (SFTA). These rates allow Swiss entities to comply with the arm’s length principle for intra-group loans without without complex benchmarking.
When applied correctly, Swiss tax authorities accept them as compliant—thus reducing tax audit risks.
2025 Rates: Key Updates at a Glance
| Currency | Type | 2025 |
|---|---|---|
| CHF | Minimum (equity‑financed receivables) Max operating loan (≤ CHF 1m) Max operating loan (> CHF 1m) | 1.00% 3.50% 1.75% |
| EUR | Minimum (foreign‑currency loan) | 2.50% |
| USD | Minimum (foreign‑currency loan) | 4.25% |
– Effective January 1 – December 31, 2025
– Retroactive application from January 1, 2025
Practical Considerations for Tax and Treasury Teams
- Swiss-only presumption: Foreign tax authorities may not accept these rates for cross‑border loans—transfer pricing documentation may still be needed.
- Exclusions: Short‑term funding and cash‑pooling structures do not qualify and must be benchmarked separately.
- Credit risk ignored: These rates ignore borrower creditworthiness. For loans with higher risk profiles, supporting comparable market data is essential.
- Non‑compliance risks: Applying non‑arm’s length rates without documentation can lead to hidden profit distributions and possible Swiss withholding tax of 35% (or reduced in case a Double Taxation Treaty would be applicable).
Recommended Next Steps for CFOs & Tax Leads
- Catalogue intra‑group loans: Determine eligibility for Safe Harbour treatment.
- Amend contracts to reference the 2025 Safe Harbour rates where applicable.
- Prepare transfer pricing documentation or seek tax rulings for cross‑border or high‑value loans.
- Align treasury policies to ensure consistency globally.
Conclusion: Leverage the Rules, Mitigate the Risks
The 2025 Safe Harbour rates reflect the present interest rate environment in Switzerland and serve as an effective compliance tool—when used correctly. For loans that fall outside their scope, prudent documentation or official rulings are key to avoiding tax ambiguity or material exposure.
Brought to you by the AGN EMEA Tax Committee
If you have any questions in relation to this article, please get in touch with Rocco.
Rocco Arcidiacono
Partner & Swiss certified tax expert, TEP
Fiduciaria Mega SA
