Transfer Pricing
Country Summary

This document outlines France’s transfer pricing regulations and guidelines, shedding light on the country’s approach to handling intercompany transactions and ensuring compliance with the arm’s length standard. Key points include the historical development of French transfer pricing laws, the legal and administrative foundations for these regulations, and the introduction of country-by-country reporting (CbCR) in 2016. It also delves into the definition of related parties, the nature of transfer pricing documentation, combatting tax havens, the Advance Pricing Agreement (APA) process, transfer pricing audit practices, and detailed requirements for transfer pricing documentation, with a focus on large corporations. The document underscores the penalties and interest charges for non-compliance.


France has a well-established framework for regulating transfer pricing, rooted in the historical adoption of these rules as far back as 1933. These regulations follow OECD principles and guidelines. They are applied to ensure that intercompany transactions meet the arm’s length standard, with specific documentation requirements varying based on the size of the companies involved.

France adopted country-by-country reporting (CbCR) in 2016, bolstering its transfer pricing regulations. Key legal references for these regulations include the French Tax Code and Tax Procedure Code, aligning with the OECD’s recommendations from BEPS Action 13.

Related party relationships are scrutinized, both legally and factually, and French tax authorities have authority to act in cases involving preferential tax regimes. Transfer pricing documentation emphasizes the arm’s-length principle, bolstered by recent legislative measures and tax enforcement actions.

To combat tax avoidance, France introduced mechanisms that target transactions in tax havens and preferential tax jurisdictions, emphasizing the arm’s length principle and the need to prove transaction validity.

Advance Pricing Agreements (APAs) are available, offering flexibility in their execution, provided certain conditions are met. These APAs are kept confidential by French authorities, but international agreements may lead to information exchange.

Transfer pricing audits are conducted by local tax authorities and target specific behaviors and techniques indicative of profit shifting. Requirements for large corporations are extensive and demand detailed documentation, encompassing master files, local files, and industry-specific analyses.

Various transfer pricing methods, such as the Comparable Uncontrolled Price (CUP) method, Resale Price method, Cost Plus method, Profit Split method, and Transactional Net Margin Method (TNMM), are recognized in France. These methods are applied depending on the circumstances and appropriateness.

To support transfer pricing assessments, benchmark studies are conducted, with a focus on major intra-group transactions.

Inter-company legal agreements, though significant, have a lower priority compared to the “conduct of parties” concept according to OECD Guidelines.

France has also aligned with EU regulations on country-by-country reporting, which may become public.

Documentation requirements are detailed, specifying the format, filing deadlines, thresholds, and mandatory languages. This documentation must be retained for at least six years.

Penalties for non-compliance with transfer pricing documentation requirements differ for SMEs and large enterprises and are applied in addition to other tax penalties.

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