France: New transfer pricing provisions introduced by the 2014 Finance Law

Tax Insights ()

The 2014 Finance Law, published on 30 December 2013, included several transfer pricing provisions covering:

  • removal of the suspension of tax payments when a mutual agreement procedure (MAP) is initiated;
  • provision of management and consolidated accounts as part of a tax audit; and
  • requirement to disclose tax rulings in transfer pricing documentation.

Further clauses were included in the draft legislation but were not approved by the Constitutional Court covering:

  • penalty for missing or incomplete documentation assessed as a percentage of turnover and not of the reassessed amounts; and
  • need to provide an arm’s length indemnity in case of a transfer of functions or risks triggering a decrease of operating income.