Arsene Taxand - Transfer Pricing
French Tax Authorities’ Instruction 4 A-10-10 commenting on the new transfer pricing documentation obligation
January 10 2011
This eagerly awaited Instruction commenting on the new transfer pricing regulation relating to documentation obligation, codified, in particular, in Article L13AA of the French Tax Procedure Code and in force since 1 January 2010, was signed on 23 December 2010.

No fundamental changes have been made to this final version as compared to the last draft dated April 2010 even if the following three clarifications should be noted:

  • Concerning permanent establishments : the text specifies to what extent permanent establishments of foreign companies in France fall within the scope of the documentation obligation but some questions raised by adoption of the text remain pending, in particular those concerning the need to document transactions between a French company and its permanent establishment abroad.

  • Concerning penalties : the text specifies the terms and conditions of application and more especially of adjustment of the 5% penalty, firstly by limiting the application of the maximum rate to cases of complete absence of documentation and secondly by avoiding the application of the penalty in the cases where the taxpayer and the tax authorities do not agree on the appropriateness of the selected transfer pricing the method

  • Concerning the link with the European and conventional mutual agreement procedures : the text stipulates that the suspension of the period needed for assessing taxes as provided for in Article L189A of the French Tax Procedure Code is not extended to the penalty for lack of documentation but that this penalty will be reduced proportionally depending on the outcome of the European and conventional mutual agreement procedures.

The publication of this Instruction, which takes place at the end of the 2010 financial year for companies whose financial year-end date is 31 December, very likely shows the tax authorities’ intention that the provisions of these regulations should be effectively implemented by companies at the time they file their corporate income tax return for tax year 2010.

The Arsene Taxand’s Transfer Pricing team remains at your disposal, should you require any further information.




summary_of_the_french_tax_authorities__instruction_4_a_10_10__unofficial_version_.pdf (466.64 Ko)

French Tax Authorities’ Instruction 4 A-10-10 commenting on the new transfer pricing documentation obligation

Arsene Taxand - Transfer Pricing



French Tax Authorities’ Instruction 4 A-10-10 commenting on the new transfer pricing documentation obligation
This eagerly awaited Instruction commenting on the new transfer pricing regulation relating to documentation obligation, codified, in particular, in Article L13AA of the French Tax Procedure Code and in force since 1 January 2010, was signed on 23 December 2010.

No fundamental changes have been made to this final version as compared to the last draft dated April 2010 even if the following three clarifications should be noted:

  • Concerning permanent establishments : the text specifies to what extent permanent establishments of foreign companies in France fall within the scope of the documentation obligation but some questions raised by adoption of the text remain pending, in particular those concerning the need to document transactions between a French company and its permanent establishment abroad.

  • Concerning penalties : the text specifies the terms and conditions of application and more especially of adjustment of the 5% penalty, firstly by limiting the application of the maximum rate to cases of complete absence of documentation and secondly by avoiding the application of the penalty in the cases where the taxpayer and the tax authorities do not agree on the appropriateness of the selected transfer pricing the method

  • Concerning the link with the European and conventional mutual agreement procedures : the text stipulates that the suspension of the period needed for assessing taxes as provided for in Article L189A of the French Tax Procedure Code is not extended to the penalty for lack of documentation but that this penalty will be reduced proportionally depending on the outcome of the European and conventional mutual agreement procedures.

The publication of this Instruction, which takes place at the end of the 2010 financial year for companies whose financial year-end date is 31 December, very likely shows the tax authorities’ intention that the provisions of these regulations should be effectively implemented by companies at the time they file their corporate income tax return for tax year 2010.

The Arsene Taxand’s Transfer Pricing team remains at your disposal, should you require any further information.

summary_of_the_french_tax_authorities__instruction_4_a_10_10__unofficial_version_.pdf Summary of the French Tax Authorities’ Instruction 4 A-10-10 (unofficial version).pdf  (466.64 KB)