Insights

Receivables and liabilities involving related parties must comply with the arm’s length principle according to tax law. If these are inadequately interest-bearing, a taxable adjustment of interest income or a reduction of interest expense is made for the amount of the difference to an arm’s length interest rate. On February 26, 2024, the tax administration published the new tax-recognized interest rates (so-called safe-harbor rates) for 2024. While the previous year saw significant increases in interest rates, the adjustments for 2024 were more moderate. For Swiss francs and other currencies, there were even the first reductions in rates.