Transfer Pricing for the International Practitioner in France

April 12, 2010
The French transfer pricing (TP) rules are the main tool available to the French Tax Authorities (FTA) to reassess non–arm’s length operations between related parties in an international context. French TP principles were incorporated into the country’s legislation under Article 57 of the French Tax Code (hereafter FTC). The French TP rules specifically apply to cases where a non–arm’s length provision is made between two related parties, notably by decreases or increases in prices set for the sale of goods and/or services. In such a situation, the taxable income derived by such an operation is determined by reference to the income which would have been derived between the parties, had they been acting independently. In 2010, documentation requirements were incorporated into French law, for MNE’s.