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Loan agreements between related parties — interest rate 3.95 % for 2023

All loan agreements between related parties must have a defined market interest rate — for 2023 it is 3.95 %. Risk of tax adjustments.

FP Finance Plus 4 December 2023

Check whether all loan agreements with related parties have a defined interest rate of 3.95 % for the year 2023.

Why this matters

Loans between related parties must comply with the arm’s length principle — which means the interest rate must be in line with market conditions.

If the interest is not at market level — the Tax Administration may:

  • Adjust taxable profit
  • Claim tax liability on the difference
  • Claim default interest

What to check

  • Whether the loan agreement contains a defined interest rate
  • Whether the rate is in accordance with the publication of the Tax Authorities for that year (3.95 % for 2023)
  • Whether there is TP documentation for loans above the prescribed thresholds

Do you need a review of loan agreements with related parties? Contact Finance Plus.

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