Tax-recognized interest rates for advances/loans in foreign currencies

The Federal Tax Administration (ESTV) has announced the tax-recognized interest rates for advances/loans in foreign currencies effective from January 01, 2013. More detailed information can be found in the present blog post.

In addition to appropriately interest-bearing advances or loans, non-interest or insufficiently interest-bearing advances or loans to participants or their close third parties, as well as cash benefits by participants or their close third parties in the true sense, are subject to a withholding tax of 35%. The Federal Tax Administration (ESTV) regulates adequate interest on advances or loans between corporations and participants or their close third parties. By defining minimum and maximum interest rates, criteria for determining the market conformity of a service are established.

The ESTV has defined the applicable interest rates for advances or loans in foreign currencies effective from January 01, 2013.‍

Interest rates for advances/loans to participants or close third parties in foreign currencies

‍For an interest rate in foreign currency below the interest rate for advances/loans in CHF (according to the circular of the ESTV dated February 25, 2013), at least the latter must be ensured.

‍Interest rates for advances/loans from participants or close third parties in foreign currencies

‍An interest rate in foreign currency below the interest rate for advances/loans in CHF (according to the circular of the ESTV dated February 25, 2013) is tax permissible up to the level of the latter.

More detailed information on the regulations and an explicit listing of the applicable interest rates can be found in the document linked above.