FranceFrance

Legal ReferenceArticle 57 of the General Tax Code (Code général des Impôts) is the equivalent in domestic law of Article 9 of the OECD Model Tax Convention.

Legal ReferenceBulletin Officiel des Finances Publiques (Official Public Finances Bulletin) BOI-SJRES-20-20250115 of the 15th of January 2025, on APAs. Bulletin Officiel des Finances Publiques BOI-INT-DG-20-40-20250115 of the 15th of January 2025, on general transfer pricing guidance, treaty provisions and practical issues. Bulletin Officiel des Finances Publiques BOI-BIC-BASE-80-20-20140218 of the 18th of February 2014, on definition, calculation, documentation, control and procedure about transfer pricing between associated enterprises.

Although the OECD Transfer Pricing Guidelines are not prescriptive under French domestic law or regulation, French administrative doctrine makes express references to them. French domestic administrative doctrine refers to the OECD Transfer Pricing Guidelines (TPG) for the arm’s length principle and for the methods used for determining the transaction price between related parties under this principle.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-20-20150902 of the 2nd of September 2015 on indirect transfer of profits between dependent enterprises, guidance on control and transfer pricing audit procedures. Article 57 of the General Tax Code (Code général des Impôts).

In the context of transfer pricing, associated enterprises are those that depend on or control enterprises outside France. Article 57 of the General Tax Code refers to the notion of dependence but does not define it; dependence can be either de jure or simply de facto. Moreover, Article 57 dispenses the tax authorities from having to prove the relationship of dependence or control in respect of profit transfers to enterprises located in a foreign State or territory outside France that has a preferential tax regime, or that are incorporated or constituted in a non-cooperative jurisdiction or territory as it is determined by French law. Administrative doctrine provides that: De jure dependence is established if a French enterprise is dependent on a foreign enterprise, which is the case if the foreign enterprise holds a preponderant share of the French enterprise’s equity or an absolute majority of the voting rights. In practice, holding more than 50 % of the shares is enough to characterize dependency or control. De facto dependence may either be contractual or stem from conditions underlying the dealings between the two enterprises (there is abundant case law illustrating this notion of de facto dependence). For example, if the foreign enterprise is empowered to perform functions that include decision-making affecting the French enterprise, either directly or through intermediaries.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th of November 2023 on indirect transfer of profits between dependent enterprises, providing guidance on definitions and principles on determining transfer pricing.

There is no specific legislation or regulation on transfer pricing methods to be used, but the French administrative doctrine provides that the guidance in the OECD Transfer Pricing Guidelines should be followed.

• CUP (not provided)
• Resale Price (not provided)
• Cost Plus (not provided)
• TNMM (not provided)
• Profit Split (not provided)
• Other (not provided)

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th of November 2023.

There is no specific legislation or regulation on transfer pricing methods to be used, but the French administrative doctrine provides that the guidance in the OECD Transfer Pricing Guidelines should be followed. The most appropriate method is to be selected after performing a functional analysis in order to identify the arm’s length price between independent companies.

• Hierarchy of methods (not selected)
• Most appropriate method (selected)
• Other (not selected)

There is no specific guidance on commodity transactions.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-INT-DG-20-40-20250115 of the 15th of January 2025. Bulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th November 2023. Bulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-40-20180718 of the 18th July 2018 on the transfer pricing documentation requirement.

French guidance mentions the need to carry out a comparability analysis in order to test the arm’s length principle.

There is no preference defined in the French domestic law or regulation. However, in practice, because of the specificities of each domestic market, national comparables are deemed to better meet the requirement of comparability. Then, in the absence of usable national comparables, the use of foreign comparables does not present difficulties.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-INT-DG-20-40-20250115 of the 15th of January 2025.

However, in the absence of transfer pricing documentation or if such documentation is insufficient, the French tax authorities may use their own comparative analysis based on publicly available data and communicate it to the taxpayer.

In general, French administrative doctrine refers to the OECD transfer pricing principles for the arm's length principle and for the methods used to determine the transaction price between related parties under this principle. It is common to use the interquartile range as the arm's length range (companies located between the first and third quartiles) and to consider the median as the most appropriate point of comparison when the result of the tested party is outside the interquartile range.

Comparability adjustments can be accepted (not required) when specific circumstances justify it.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th of November 2023.

French administrative doctrine provides guidance on Hard-to-value intangibles (HTVI) outlined in Chapter VI of the TPG and the provision of an intangible asset (e.g. know-how).

Legal ReferenceArticle 238 of the General Tax Code (Code général des Impôts).

Article 238 of the General Tax Code provides a special rule for transactions involving capital gains on the transfer of patents, patentable inventions or improvements made therein. This rule provides that companies may, under certain conditions, subject to separate taxation at a reduced rate the net income issued from the sale, concession or sub-concession of patents and similar intangible assets.

Legal ReferenceArticle 238 bis-0 I ter of the General Tax Code (Code général des Impôts).

Yes, French domestic transfer pricing framework follows the guidance on HTVI in Chapter VI of the TPG.

Legal ReferenceArticle 1649 AH II E 2° of the General Tax Code (Code général des Impôts). Article 238 bis-0 I ter of the General Tax Code (Code général des Impôts).

According to article 1649 AH of the General Tax Code, HTVI are intangible assets or rights to intangible assets for which, at the time of their transfer between associated companies: a) There are no reliable comparables; and b) At the time the transaction was entered into, the projections of future cash flows or income expected from the transferred intangible asset, or the assumptions used to value that intangible asset, are highly uncertain, and it is therefore difficult to predict the extent to which the intangible asset will ultimately be successful at the time of transfer. According to article 238 bis-O I ter of the General Tax Code, the value of an HTVI transferred may be adjusted based on results after the financial year in which the transaction took place. This adjustment does not apply when: 1) The taxpayer provides detailed information on the forecasts used at the time of the transfer to determine the prices and establishes that the significant difference between these forecasts and the actual results is due either to the occurrence of events that were unforeseeable at the time the price was determined or to the occurrence of foreseeable events, provided that their probability of occurrence was not significantly underestimated or overestimated; 2) The transfer is covered by a prior bilateral or multilateral pricing agreement; 3) The difference between the valuation resulting from the forecasts and that established on the basis of actual results is less than 20%; 4) A marketing period of five years has elapsed after the year in which the asset first generated income from an entity not related to the transferee and the difference is less than 20%.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th of November 2023.

No, French domestic legislation implements the OECD’s recommendations.

Legal ReferenceArticle L171 B of the Tax Procedure Code (Livre des procédures fiscales). Article L51 of the Tax Procedure code (Livre des procédures fiscales).

The administration's right of recovery is extended, in respect of these transactions, until the end of the sixth year following the year in which the tax is due. In addition, a new exception to the guarantee of non-renewal of the accounting audit is provided for.

Legal ReferenceArticle 238 bis-0 I ter of the General Tax Code (Code général des Impôts). Article L171 B of the Tax Procedure Code (Livre des procédures fiscales). Article L51 of the Tax Procedure Code (Livre des procédures fiscales).

Legal ReferenceArticle 238 bis-0 I ter of the General Tax Code (Code général des Impôts). Article L171 B of the Tax Procedure Code (Livre des procédures fiscales). Article L51 of the Tax Procedure Code (Livre des procédures fiscales).

Legal ReferenceArticle 238 bis-0 I ter of the General Tax Code (Code général des Impôts).

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th of November 2023.

French administrative doctrine provides general guidance in this respect that largely follow the guidance in Chapter VII of the TPG, in particular in identifying whether intra-group services have been rendered (benefits test) and in determining an arm’s length charge for these services. For the expense to be deductible the service provided must meet a genuine need of the beneficiary company and the service provided must not duplicate services already existing within the subsidiary. In addition, these services must be remunerated at the same price as if they were provided to an independent company.

French domestic legislation does not contain as such specific guidance on low value adding intra-group services. However, French domestic administrative doctrine refers to the OECD Transfer Pricing Guidelines for the arm’s length principle and for the methods used for determining the transaction price between related parties under this principle.

The French tax administration does take into account the EU Joint Transfer Pricing Forum recommendations regarding the simplified approach for low value-adding intra-group services.

Legal ReferenceArticle 57 of the General Tax Code (Code général des Impôts) is the equivalent in domestic law of Article 9 of the OECD Model Tax Convention.

Article 57 of the General Tax Code allows the tax administration to ensure compliance with the arm's length principle and to reassess profits declared in corporate income tax returns when these profits have been indirectly transferred abroad. These provisions are intended to apply to all types of transactions, including financial transactions such as loans, cash pooling, or guarantees.

Article 39 of the General Tax Code allows the deduction of interest paid to partners on certain conditions as long as they do not exceed the average rates charged by banks. Article 212 bis of the General Tax Code caps the deduction of net financial charges of companies subject to corporation tax at 30% of their profit before taxes, interest, depreciation and amortization (“EBITDA fiscal”), or at EUR 3 million if this amount is higher. An anti-hybrid rule (Article 205 B of the General Tax Code) prohibits the deduction of sums when the income is not included in the taxable income of the beneficiary due to a hybrid asymmetry.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-10-20231122 of the 22th of November 2023.

There is no specific legislation or regulation on cost contribution agreements, but the French administrative doctrine provides some general guidance in this respect. This agreement must relate to services which must be remunerated at the same price as if they were provided between independent companies. The individualized services must be invoiced directly and for other services the valuation methods must be sufficiently precise so that the prices conform to the market price. The method adopted must be representative of the value of the services rendered, which excludes any flat-rate allocation method. The use of an individualized distribution key is recommended.

• Master file consistent with Annex I to Chapter V of the TPG (selected)
• Local file consistent with Annex II to Chapter V of the TPG (selected)
• Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
• Specific transfer pricing returns (separate or annexed to the tax return) (not selected)
• Other (specify): (not selected)

Legal ReferenceArticle L 13 AA of the Tax Procedure Code (Livre des procedures fiscales). Article L 13 AB of the Tax Procedure Code (Livre des procedures fiscales). Article 223 quinquies B and quinquies C of the General Tax Code (Code général des Impôts). Deadline for the filing date is within 6 months after filing corporate tax result for 223 quinquies B and it is within 12 months of the group’s financial year closure for CBC under Article 223 quinquies. Article 57 of the General Tax Code (Code général des Impôts): transfer pricing documentation has been enforceable against taxpayers since the 1st of January 2024. More information.

The transfer pricing documentation requirements in the French tax law covers all transactions between associated companies. Under Article L 13 AA of the Tax Procedure Code, any entity which belongs to a group, whose annual turnover or balance sheet assets is at least EUR 150 million, is required to keep available both a master and a local file. Article 223 quinquies B of the General Tax Code requires from companies whose turnover or balance sheet assets is at least EUR 50 million to file every year a simplified version of the master and local file. Article 223 quinquies C of the General Tax Code faithfully transposes the OECD recommendations regarding the country-by-country (CBC) reporting, for MNEs exceeding the threshold of EUR 750 million. The administration has the possibility to request the documents written in a foreign language to be translated in French. Where an enterprise does not produce the required documentation, the administration shall send a formal notice to produce it within thirty days.

Legal ReferenceArticle 1735 ter of the General Tax Code (Code général des Impôts). Article 1735 of the General Tax Code (Code général des Impôts). Article 1729B and 1729F of the General Tax Code (Code général des Impôts).

An audited enterprise that fails to produce the required documentation can be liable to a fine provided by Article 1735 ter of the General Tax Code. This fine, that cannot be less than EUR 50 000, may reach 0.5% of the amount of transactions covered by the documents undelivered, or 5% of the profits reassessment. In case an enterprise does not fulfil the conditions provided under Article L 13 B of the Tax Procedure Code, Article 1735 of the GCT provides that such enterprise is liable to a fine of EUR 10 000 per tax year. With regard to Article 223 quinquies B of the General Tax Code, a fine of EUR 150 is provided by article 1729 B. For the country-by-country report, the fine provided in Article 1729 F of the GCT cannot exceed EUR 100 000.

The French tax law does not provide any exemption other than those resulting from turnover and / or assets balance thresholds.

Legal ReferenceFrance’s MAP Profile. For further information on APAs, please refer to the French MAP profile, doctrine PT APA.

Regarding MAP, the French tax administration does apply arbitration with partners with which France has an agreement containing an arbitration clause (39 jurisdictions in June 30th 2024). For further information on APAs, please refer to the French MAP profile and doctrine PT APA.

• Rulings (selected)
• Enhanced engagement or cooperative compliance programmes (selected)
• Advance Pricing Agreements (APA) (selected)
• International Compliance Assurance Programme (ICAP) (selected)
• Mutual Agreement Procedures (selected)
• Other (please specify): (not selected)

Consistently with the Inclusive Framework political commitment, France applies since January 1st, 2025, the simplified and streamlined approach for baseline marketing and distribution activities ("Amount B") for low-capacity jurisdictions (LCJs) as defined in June 2024. However, France does not apply Amount B for resident in-scope tested parties.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-BIC-BASE-80-10-50-20250723 of the 23rd of July 2025.

Legal ReferenceMore information. Transfer pricing guideline for SMEs.

France provides a simplified APA’s procedure and simplified transfer pricing guidelines application for SMEs.

Legal ReferenceBulletin Officiel des Finances Publiques BOI-INT-DG-20-40-20250115 of the 15th of January 2025.

France considers year-end adjustments as a possibility to reach an arm's length price for economic and financial transactions within the limit of the tax statute of limitation. French legal framework does not contain a reference to year-end adjustments. However, in practice, this may be allowed in the event of special circumstances assessed on a case-by-case basis (e.g. change in economic situation or correction of an accounting error).

Legal ReferenceBulletin Officiel des Finances Publiques BOI-INT-DG-20-30-10-20250115 §520-§530 of the 15th of January 2025 on Mutual agreement procedures.

France makes secondary adjustments when the conditions exposed in the doctrine are met. In application of our domestic legislation, when the adjustment is carried out by the French tax authorities and is considered to constitute a deemed distributed profit, subject to the stipulations of the bilateral tax treaty, a withholding tax may be levied at the conventional rate on the deemed distributed profit. However, if the company agrees to repatriate the sums considered to constitute a transfer of profits within 90 days of receipt of the proposal, the notified withholding tax will not be maintained.

The wording of article 7 in most of France’s actual double tax treaties (about 120) corresponds to the pre-2010 version of Article 7 in the OECD Model Tax Convention. Only three of the double tax treaties in force are based on the post-2010 version of Article 7.

• Article 7 as it read before 2010. (selected)
• Article 7 as it reads after 2010. (selected)
• Other (please provide additional details) (not selected)

France has not adopted the Authorised OECD Approaches for the attribution of profits to PEs (AOA). Nonetheless, France has already used this method to solve MAP cases for fiscal years post-2010. In practice, this methodology was used to solve cases involving the banking sector regarding the question of capital allocation.

Legal ReferenceArticle L45 of the Tax Procedure Code (Livre des procedures fiscales). France’s MAP Profile.

For more information on the MAP and APA procedures, please refer to the OECD MAP Portal. Use of the administrative cooperation instruments provided for in Articles 28 and 29 of Council Regulation (EU) No 904/2010 of 7 October 2010 and in Articles 11, 12 and 12a of Council Directive 2011/16/EU of 15 February 2011.