Switzerland sets 2026 interest rates for loans in CHF, foreign currencies

The Swiss Federal Tax Administration has published 2026 interest rates for loans in Swiss francs and foreign currencies. The circulars set minimum and maximum rates to prevent undeclared pecuniary benefits.

The Swiss Federal Tax Administration has issued two circulars outlining Financing in Swiss Francs on 29 January 2026and Financing in Foreign Currencies on 30 January 2026.

Financing in Swiss Francs

The following details outline the tax-admitted interest rates for 2026 regarding advances or loans in Swiss francs, as established by the Swiss Federal Tax Administration (AFC) effective 1 January 2026. These rates are considered “safe haven” rates, though higher rates may be justified if they can be proven to align with those used between independent third parties.

1. Loans Granted by the Company (Minimum Interest Rates)

When a company provides funds to its shareholders or related parties, it must charge at least the following interest rates to avoid being considered a “monetary benefit” (deemed dividend):

*The required margin on debt-financed loans is ½ % for amounts up to CHF 10 million and ¼ % for the portion exceeding CHF 10 million.

2. Loans Received by the Company (Maximum Interest Rates)

When a company receives loans from its shareholders or related parties, the interest paid by the company cannot exceed the following limits:

1. Real Estate Credits

*Financing limits: maximum 70% for building land, villas, apartments, holiday homes, and industrial buildings; maximum 80% for other properties.

1. Operating Credits

For these calculations, credits from all shareholders and related parties must be aggregated to determine the CHF 1 million threshold.

Financing in Foreign Currencies

This circular letter from the Swiss Federal Tax Administration (AFC), dated 30 January 2026, establishes the tax-recognized interest rates for 2026 regarding advances or loans in foreign currencies.

Core Regulatory Principles

The primary goal of these rates is to prevent the distribution of “pecuniary benefits” (prestations appréciables en argent) that bypass standard tax procedures.

• Pecuniary Benefits: These occur if a company grants interest-free or low-interest loans to its shareholders (or related third parties), or if it pays excessively high interest rates on debts held by those same parties.
• Tax Consequences: Such benefits are subject to a 35% withholding tax (impôt anticipé) under the Federal Act on Withholding Tax (LIA). They must be declared spontaneously within 30 days of their due date using Form 102. These criteria also apply to the calculation of direct federal tax for corporations and cooperatives.
• Determination of Rates: The AFC determines these indicative values based on 5-year Swap rates and yields from long-term investments, such as industrial corporate bonds.

Application Guidelines

The application of these rates depends on the direction of the loan:

1. Loans granted BY the company (to shareholders/related parties):

• Minimum Rate: If the specified foreign currency interest rate is lower than the rate for Swiss francs (CHF) set in the 29 January 2026 circular, the CHF rate must be used as the minimum.
• Equity vs. Debt Financing: These rates apply if the loan is financed by the company’s equity. If financed by debt, the interest rate must cover the company’s cost of debt plus a 1/2% margin, provided this total is at least as high as the rate published in this circular.

2. Loans received BY the company (from shareholders/related parties):

• “Safe Haven” Solution: These rates serve as a safe harbor for foreign currency liabilities.
• Operating Credits: For operating credits, specific spreads can be added to the base rate. For amounts up to a CHF 1 million equivalent, a spread of 2.75% or 2.25% may be used; for amounts exceeding CHF 1 million, the spread is 0.75% or 0.50%.
• Justification: Higher rates may be used if they can be justified by a third-party comparison. However, companies must provide commercial justification for why they did not opt for a CHF loan at a lower interest rate.
• Hidden Equity: Calculations must account for potential hidden equity (capital propre dissimulé) as defined by AFC Circular No. 6a.

2026 Foreign Currency Interest Rate Table

The following table outlines the tax-recognized interest rates for 2026 for various countries and currencies as specified in the sources: