• Service: Tax, Global Transfer Pricing Services, International Tax
  • Type: Regulatory update
  • Date: 11/6/2013

France - New reporting requirements in addition to transfer-pricing documentation 

November 6:  The French Assemblee nationale on 5 November 2013 passed legislation (intended to counter tax fraud and to address certain financial and economic crimes) that includes new reporting requirements for companies that are already subject to the French transfer pricing documentation rules.

Article 45 of the legislation includes a new filing requirement for companies that are within the scope of article L 13 AA of the French tax procedure rules—i.e., the transfer pricing documentation rules for entities established in France that (1) have an annual turnover of €400 million or total gross assets exceeding €400 million; (2) are directly or indirectly held by a company meeting one of the €400 million thresholds; or (3) belong to a French tax consolidated group that includes a company meeting one of the above requirements.

New document, information requirements

Companies whose deadline for filing their annual corporate income tax return falls on a date that is after the effective date of the new law will need to comply with the new requirements to file certain documents and information (outlined below) with the French tax authorities by a date that is six months after the date for filing their income tax return.

General information on the group of associated enterprises

  • A general description of the business activities, including any changes that occurred during the fiscal year
  • A list of principal intangible assets—patents, trademarks, trade names, and know-how—related to the enterprise
  • A general description of the group’s transfer pricing policy and any changes made during the fiscal year

Specific information regarding the enterprise

  • A description of the entity’s business activities, including any changes that occurred during the fiscal year
  • A summary of the transactions conducted with other associated enterprises, according to transaction type and amount, if the aggregate amount per transaction type exceeds €100,000
  • A presentation of the method(s) for determining transfer prices in accordance with the arm’s length principle, indicating the principal method used and any changes made during the fiscal year

KPMG observation

It is anticipated that the procedures* for enactment will be completed so that the effective date for the new law will be on or before 30 November 2013.

*Under French legislative procedures, when no additional measure is necessary for the application of the law and when the law itself does not provide for a specific date, the date of enactment is the day after the law’s publication in the Journal Officiel for Paris and two days after the receipt of the Journal Officiel in other French areas.

Accordingly, companies that file their corporate income tax returns after 30 November 2013 (i.e., entities whose financial year was closed as of 31 August 2013 or later) will be required to file the new information and documents with the French tax authorities within six months of the date for filing their returns.

Tax professionals in France have observed that with the enactment of this new law, it will be critical for companies (or French branches of foreign companies) that fall within the scope of the new reporting requirements to arrange their books and records so as to be in a position to comply with the new requirements on a timely basis.

It is expected that the French tax authorities will issue guidelines, in the very near future, containing practical information on the filing procedures (i.e., electronically, paper, etc.).

Lastly, it has been observed that this change to French tax law appears to be part of a broader transfer pricing-related package of measures, including draft provisions on the transfer of risks and functions by French companies—draft provisions that were removed from the first iteration of the 2014 Finance Bill for the time being, but are likely to be considered in the coming weeks under the second iteration of the 2014 Finance Bill.

For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services group (Fidal*) in Paris:

Olivier Kiet, Partner

+ 33 1 55 68 1615

Pascal Luquet, Partner

+ 33 1 55 68 15 22

Kate Noakes, Partner

+ 33 1 55 68 16 57

Xavier Sotillos Jaime, Director

+33 1 55 68 14 85

* Fidal Internationale is an independent legal entity that is separate from KPMG International and its member firms.

Or contact a tax professional with KPMG's Global Transfer Pricing Services.

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Washington, DC 20006.


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