en
Contact
Don't confuse documentation obligations with transfer pricing declaration obligations! We explain the difference and who is concerned.
Many companies are aware that they must have transfer pricing documentation, but some forget that they must file an annual transfer pricing declaration.
The aim of this article is to clarify who is affected by this reporting obligation and to clear up the most common misunderstandings.
The annual transfer pricing declaration is a reporting obligation that is separate from the transfer pricing documentation.
It enables the tax authorities to gather information on the transfer pricing policy implemented within groups.
The declaration must be made using form 2257-SD, a model of which is available on the French tax authorities' website: impots.gouv.fr.
The term "simplified documentation" is sometimes used to refer to Form 2257-SD, which can be confused with transfer pricing documentation. In reality, these are two separate obligations, which do not necessarily concern the same companies:
The thresholds for the reporting obligation differ from those for the documentary obligation.
Companies whose net sales or gross assets exceed €50 million are required to file a transfer pricing declaration (form 2257-SD).
This threshold is assessed on the basis of data provided in the company's articles of association, at the level of the company, its parent company, one of its subsidiaries or one of the companies in the tax consolidation group.
Companies whose net sales or gross assets exceed€150 million are subject to the documentary obligation. This threshold is assessed on the basis of statutory data, at the level of the company, its parent company, one of its subsidiaries or one of the companies in the tax consolidation group.
Therefore, companies with a turnover of between 50 and 150 million euros must:
Form 2257-SD must be filed electronically within 6 months of filing your tax return. For a tax year ending on 31 December N, the declaration must be sent by the beginning of May N+1 at the latest.
A penalty of 150 euros is applied for failure to declare a transfer pricing policy (article 1729 B of the General Tax Code). In the event of omission or inaccuracy, a fine of 15 euros per error is applied. The total fine cannot be less than 60 euros or more than 10,000 euros.
While the penalty for failing to declare is low, it is essential to understand that this form gives the French tax authorities an overview of your transfer pricing policy. It enables them to quickly assess the nature and volume of intra-group transactions, as well as the countries involved. This form therefore plays a key role in planning tax audits.
In the age of data mining, failure to declare your transfer pricing policy may arouse suspicion and attract particular attention from the French tax authorities.
The annual transfer pricing declaration is an essential requirement to ensure your company's tax compliance.
Remember to document and/or declare your transfer pricing policy, and make sure you meet the deadlines set to avoid any penalties.
To find out more, consult our FAQ on transfer pricing declarations available on our website. You'll find clear, additional answers to help you better understand this reporting obligation.
.svg)
