The Federal Council Insists on Five Percent Interest on Arrears
Published: Wednesday, Aug 16th 2023, 12:40
Updated At: Friday, Oct 13th 2023, 14:12
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The Swiss Federal Council has decided against reforming the current fixed interest rate of 5% for late payments. This rate has been in place for many years and is firmly rooted in Swiss legal tradition. The original justification for the reform, which was proposed in 2016, was that the low interest rate environment would be an additional financial burden for many companies. However, the Federal Council believes that the interest rate should not only compensate creditors for late payments, but also encourage debtors to pay their obligations as soon as possible. Parties are free to agree on a different interest rate or waive it altogether. The proposal for reform was put forward by National Council Member Fabio Regazzi in 2016 and was debated in both Parliament and Commission. The proposed reform was based on the Swiss reference rate Saron and the minimum interest rate would be at least 2%. However, the majority of cantons and representatives of the business community rejected the revision. The two chambers of Parliament will now discuss the proposal.nnnnnnnnnn
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