France Tax alert - Transfer pricing: Draft law of 18 July 2013

18 July 2013

Laurence Clot - Vaea Pery - Anton Chyrkov - Coralie Dedieu

Transfer pricing: harshening of documentary requirements

The current French legislation provides as at today that large companies established in France (i.e. a company whose turnover (VAT excluded) or gross assets is higher than or equal to EUR 400,000,000; or a subsidiary or a parent of such a company) shall provide with the French tax authorities, when a tax audit starts, a proper transfer pricing documentation to justify the transfer pricing policy applicable to all kind of transactions entered into affiliates.

The draft Bill relating to the fight against tax fraud and serious economic and financial crime, adopted, on first reading, by the French Senate on July 18th, 2013, contemplates to create a specific obligation for groups of companies.

Companies should provide with a transfer pricing documentation within 6 months following the annual tax return containing amongst others:

- A list of intangibles assets; and

- A list of intra-group transactions, by nature and amount, where the global amount of each kind of transaction is higher than EUR 100,000.

This obligation would be in force this year. Practically, integrated companies should transmit their transfer pricing documentation by November 3rd, 2013.

An amendment proposing to reduce the thresholds mentioned above from EUR 400 to 100 million was repealed but could be scrutinized during the 2014 Finance Bill debates.

Terms of the Law should be definitively voted in September 2013. This law is in the wake of the OECD report on Base Erosion and Profit Shifting published on July 19th, 2013.


Should you have any additional queries, please contact:

Laurence Clot - Attorney at law, Partner, 

Vaea Pery - Attorney at law, 

Coralie Dedieu - Attorney at law,  

Anton Chyrkov - Attorney at law, 

Jenna Scaglia - Attorney at law,