Law n° 2013-1117 of December 6th, 2013, concerning the fight against tax evasion and economic and financial crimes, has strengthened the control of international groups, by the creation of a new documentary requirement on transfer pricing.
The new annual reporting requirement applies only to firms already subject to the documentary requirement of article L 13 AA of the French tax procedures code (LPF).
These are large companies, established in France, and meeting one of the following criteria:
(i) Having a turnover or gross assets exceeding EUR 400 million or equal to,
(ii) Holding more than a half of shares or voting rights of an entity with a turnover or gross assets exceeding EUR 400 million or equal to,
(iii) Having more than half of their own shares or voting rights held by an entity satisfying the previous conditions;
(iv) Belonging to a consolidated tax group, in which at least one entity meets one of the above conditions.
Please note that under (iii) above, french subsidiaries of a group meeting (either because one entity of the group meets the thresholds or meets them on a consolidated basis) the 400 M € threshold have to maintain a TP documentation.
Under the new article 223 quinquies B of the French Tax Code (CGI), companies fulfilling one of the provisions of article L 13 AA of the French tax procedures code (LPF) must now establish and report annually to the French tax administration a documentation consisting of two types of information.
1) General information on the group entities:
– A general description of the activity pursued, and the recent changes,
– A list of major intangible assets (patents, trademarks, trade names and know-how) in relation to the company,
– A general description of the transfer pricing group’s policy and changes occurred during the year;
2) Specific information on the company:
– A description of the activity and its recent changes,
– A summary of transactions with other related entities, by nature and amount, when the aggregate amount by type of transactions exceeds EUR 100,000,
– A presentation of the methods of pricing transfer and changes occurred during the year.
Without any specific form, this information must be transmitted to the French tax authority of which the company depends, within 6 month following thedate of filing the annual statement of results providing by Article 223 I of the CGI, i.e. May 1st (for companies closing their fiscal year on December 31).