Practical tips for annual financial statements - Part 1

In the SME environment, it is widespread for loans to be granted by or to shareholders. Such payments are usually made unbureaucratically and without further documentation. It is often forgotten that there may be tax and legal risks here. We recommend paying attention to the following points:

 

1. contractual basis

  • Written loan agreement with clear conditions (interest rate, repayment terms, collateral).
  • Equal treatment as with a third party ("at arm's length transaction"): Loans must be granted at normal market conditions.

 

2. interest rate for loans on the liabilities side - maximum interest rate

If the company receives a loan from the owner, this may not bear interest at any interest rate. The maximum interest rates according to the FTA apply. For operating loans of up to CHF 1 million, an interest rate of 3.5 per cent currently (2025) applies.

 

3. asset loans - minimum interest rate, repayment capacity and amount of the loan

If the company grants the owner a loan, this must bear interest at a standard market rate. The Federal Tax Administration (FTA) publishes an annual circular with the current interest rates. For 2025, this is at least 1 per cent (if no interest has to be paid on borrowed capital).

In the case of a loan against assets, it must also be assessed whether the related party is able to repay the loan at all. If this is not the case, the loan must be impaired or amortised be paid. Furthermore, according to Art. 680 para. 2 CO, the shareholder has no right to reclaim the amount paid in. This so-called return of deposits constitutes a violation of the law and must be rectified immediately.

 

4. disclosure in the annual financial statements

  • According to Art. 959c para. 2 no. 3 CO Receivables from or liabilities to related parties in the notes to the financial statements shown separately become.

 

5 Tax risks in the event of non-compliance with the FTA requirements

  • Hidden profit distribution in the event of inappropriate conditions (e.g. interest-free loan to shareholder).
  • Hidden capital contribution possible if related party waives repayment.
  • Tax authorities (e.g. cantonal tax administrations) scrutinise such transactions particularly closely.

 

Do you have any questions on other topics relating to the preparation of annual financial statements? Our team of experts will be happy to help you.

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