Intangible Property in France

December 01, 2010

To what extent has intangible property been identified as an area of transfer pricing focus by your tax administration? Has this resulted in significant controversy in this area?

Even though no specific provisions have been enacted under French tax law to address the transfer pricing treatment of intangibles, these assets are viewed by the French tax administration as one of the most valuable category of assets, thus requiring appropriate remuneration. All functional and/or risk analysis requested or carried out by the French tax administration will include the identification of all IP assets within a Group. Similarly, in its 2006 Guide to Transfer Pricing issued for SMEs, the French tax administration explicitly provided (limited) details on the remuneration of intangible property.