French Tax Authorities released final version of the “light” transfer pricing

Tax Insights
from Transfer Pricing
French Tax Authorities released final
version of the “light” transfer pricing
documentation form
September 25, 2014
In brief
The Law against tax fraud and economic financial crime dated 6 December 2013 introduced new transfer
pricing documentation filing obligations.
French entities subject to the contemporaneous transfer pricing documentation requirements are
required to file with the French Tax Authorities (FTA) a document providing specific information on
their transfer pricing policy.
In detail
Companies concerned by the
new requirement
The new disclosure requirement
applies to all French entities
with turnover or gross assets on
the balance sheet exceeding
EUR400 million, or with a more
than 50% direct or indirect
shareholder or subsidiary
meeting this threshold.
The filing deadline
The FTA released on September
16, 2014 form n°2257 (and
corresponding guidelines) to be
used by the taxpayers to comply
with the new obligation.
The form must be submitted no
later than six months after the
deadline to file the annual
corporate income tax return to
the tax authorities. An exception
exists for companies closing at
December 31, 2013 as they are
allowed to submit the form until
November 20, 2014.
Specific information on the
French entity:
The content of the
declaration
 The aggregated amounts of
intercompany transactions
by nature (sales, services
provided, commissions
received, purchases, services
purchased, commissions
paid, etc.). A single amount
should be mentioned for
each type of transaction (i.e.
the detail by type of
products/services or by
counterparty is not
required).
Form n°2257 is in French and
consists of a table to be
completed per French legal
entity in the scope of the
obligation. The following
information has to be provided:
General information on the
group:
 A general description of the
Group activity, the nature
and the country of location of
the Group intangibles used
by the French entity.
 A broad description of the
Group transfer pricing
policies that are related to
intercompany transactions
involving the French entity.
 Only the transactions for
which the total aggregated
amount by nature exceeds
EUR100.000 shall be
documented.
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 For each kind of transaction, the
entity shall provide:


The countries of origin of the
related companies involved
in the transaction.
The main transfer pricing
method used for the
calculation of the transfer
pricing. Only the “other
methods” shall be broadly
described.
 A broad description of the entity’s
activity and the changes that
occurred during the tax year in
reassessments. It is therefore strongly
advisable to meet the deadline for
filing the light transfer pricing
documentation.
relation to the transfer pricing
policy, the nature and the country
of location of the assets (if any)
shall also be provided.
Penalties applicable
The takeaway
The law does not provide for specific
penalty for lack of filing. A lack of
filing is likely to trigger in practice a
tax audit, where the complete
documentation is likely to be
requested; if the complete
documentation is then not produced,
a maximum penalty of 5% of the
assessed amount would apply and
there would also be a risk of arbitrary
This new documentation requirement
is line with a trend to demand more
transparency from taxpayers.
Although filing the form provides
significant information to the FTA to
perform risk assessments, not filing it
is likely to trigger transfer pricing
audits.
Let’s talk
For a deeper discussion of how this issue might affect your business, please contact:
Transfer Pricing
Pierre Escaut, Paris
+33 (0) 1 56 57 42 95
[email protected]
Eric Bonneaud, Paris
+33 (0) 1 56 57 41 33
[email protected]
Xavier Sotillos Jaime, Paris
+33 (0) 156 57 43 42
[email protected]
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