France Fights Tax Evasion by Multinationals 

July 20, 2023

The French government has recently published a plan to fight public finance fraud. This includes more than 30 measures, three of which relate to Transfer Pricing

1. Bill

The French government sent an expenditure plan for 2024 to parliament that demands a US$ 4.700 million cut in outlays to the extent of pressure to reduce the deficit, even while increasing allocations for the green transition.  

The Budget Bill will include a clause that will allow the government to pursue Transfer Pricing abuses by multinationals, said the official, who declined to be quoted before the plan’s release. Transfer Pricing refers to transactions between units located abroad of the same company. 

2. Transfer Pricing

These are the measures to be carried out to fight tax fraud related to Transfer Pricing: 

  • Reducing the turnover threshold above which companies must file the Transfer Pricing documentation to the French tax authorities in the event of a tax audit.  
  • Reversing the proof burden in case of non-compliance with the Transfer Pricing documentation by companies.  
  • Extending the limitation period for transfers of certain intangible assets. 

3. Implementation of Measures

The government indicated that these measures should be included in the next Finance Bill for 2024. These are further analyzed below. 

Source: La Repú 20/07/23