France introducing new transfer pricing provisions in the 2014 Finance Law


The 2014 Finance Law was adopted by the French Parliament on 19 December 2013 and was published in the French Official Journal on 30 December 2013.


One of the core objectives of the 2014 Finance Law is to achieve structural balance with regards to public finances and to reinforce the fight against fraud and tax evasion. With respect to transfer pricing, the new provisions intend to increase the control of the French Tax Authorities over transfer pricing audits.

Transfer Pricing Provisions Introduced

Most new provisions were approved by the French Constitutional Court and are thus applicable as of 1 January 2014, i.e.:

  • Removal of the suspension of tax payments when a mutual agreement procedure (‘MAP’) is initiated after 1 January 2014. The French Tax Authorities will be able to issue a bill of payment in respect of a transfer pricing reassessment, even when a MAP has been launched.
  • Provision of management and consolidated accounts during the course of a French tax audit for large companies.
  • Disclosure of tax rulings in French transfer pricing documentation. This requirement extends to all tax rulings in the hands of the audited French entity, and not only to those related to transfer pricing.

There were also some of the draft provisions which were not approved by the constitutional court, such as the introduction of penalties for missing or incomplete documentation or the requirement to provide an arm’s length indemnity in case of a business restructuring that resulted in a significant decrease of profits.


The overall impact of the new provisions is to increase the French Tax Authority’s control over transfer pricing audits and follows the trend initiated by the OECD through its Action Plan on Base Erosion and Profit Shifting (‘BEPS’). These new provisions will result in increased transparency requirements for French taxpayers.