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To understand French regulation regarding transfer pricing documentation
Understanding transfer pricing documentation obligations is often a complex exercise for companies in a multinational group. Each country has specific rules based on different thresholds or criteria, which can lead to confusion.
In France, not all companies are required to have transfer pricing documentation.
This article clarifies the eligibility criteria, the content of this documentation, the deadlines to be met, as well as the sanctions incurred in the absence of documentation.
In France, the transfer pricing documentation requirement has been in force since January 1, 2010. It is defined in article L 13 AA of the Tax Procedures Book ("Livre des Procédures Fiscales" - LPF).
This obligation applies to companies whose net sales or total gross assets exceed a certain threshold. To assess whether this threshold has been exceeded, it is essential to rely on the statutory data of each company and not on consolidated data at the group level.
All companies established in France, including branches, are therefore subject to this obligation if their net sales or total gross assets exceed 150 million euros (threshold in force since January 1, 2024; previously set at 400 million euros).
This threshold can be reached by:
On the other hand, if your company carries out intra-group transactions with foreign entities for a total amount less than €100,000 per type of transaction, it is exempt from the documentary requirement, even if it exceeds the thresholds. This exception is provided for in article R. 13 AA-1 of the LPF.
France has adopted the documentation model recommended by the OECD. This consists of two documents:
French law does not impose any strict deadline for completing transfer pricing documentation. However, the administrative doctrine (BOFIP) recommends that it be “contemporary”.
It should be borne in mind that since 2024, transfer pricing documentation has been enforceable against companies in France. This means that it must reflect the transfer pricing policy actually applied. It is therefore strongly recommended to finalize this documentation in the months following the end of the financial year, to ensure that the transfer pricing policy described in the documentation has indeed been implemented and, if necessary, to make any adjustments.
In France, this documentation does not have to be sent to the French tax authorities when filing the tax return, unlike in some other countries. However, it must be kept and made available in the event of a tax audit. In this case, the French tax authorities require that it be provided within a period of 30 days from the date of the auditor's request.
Companies subject to documentation requirements may be fined if they fail to provide documentation (or insufficient documentation) if requested during a tax audit.
These fines are a minimum of €50,000 per fiscal year audited and can reach:
Even if your company is not subject to the transfer pricing documentation obligation, it must be able to explain, in the event of , how transfer prices are calculated and to justify that these prices are in line with market conditions.
In case of suspicion of transfer of profits abroad, the French tax authorities may implement the procedure provided for in article L. 13 B of the LPF. This procedure allows them to request detailed information on the transfer pricing policy, similar to that required in transfer pricing documentation.
If your company is required to have transfer pricing documentation, don't wait for the tax audit to prepare or update it. This has been even more necessary since 2024 when transfer pricing documentation became enforceable against companies. In practice, any discrepancy between what is described in the documentation and what is applied actually will be considered a transfer of profits abroad by the auditor.
To go further, consult our FAQ about transfer pricing documentation available on our website. You will find clear and complementary answers to better understand this obligation in France.
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