France: Tax authority updates transfer pricing guidelines for SMEs

On 22 November 2023, the French tax authority published an updated transfer pricing guide for small and medium-sized enterprises (SMEs). The guide covers a wide range of topics, including the concept of transfer pricing, the arm’s length principle, and compliance with the arm’s length principle. This guide also includes information on transfer pricing documentation and compliance, hard-to-value intangibles, intragroup financial transactions, and dispute resolution procedures.

Key updates in the guide include:

  • Transfer pricing documentation and compliance: The guide includes information on the Master and Local file obligations, the obligation to submit the transfer pricing declaration Form No. 2257-SD, and Country-by-Country reporting.
  • Hard-to-value intangibles: The guide provides guidance on the valuation of hard-to-value intangibles, such as trademarks, patents, and know-how.
  • Intragroup financial transactions: The guide provides guidance on the pricing of intragroup financial transactions, such as loans and advances.
  • Dispute resolution procedures: The guide provides information on the dispute resolution procedures available to SMEs to eliminate double taxation resulting from transfer pricing assessments.

SMEs that engage in cross-border transactions should familiarize themselves with the updated guide to ensure that they are compliant with French transfer pricing rules.

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