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Transfer pricing in france: Legal landscape of the market
A breakdown of the legal landscape of the market and how it affects the pricing of transfers in france
To begin, the issue of transfer pricing has quickly become one of the most contentious challenges that are confronted by multinational corporations (MNCs) who are operating in France. This is true despite the fact that the issue has been around for quite some time. This is because transfer price is based on an organization's internal market worth, which explains why this is the case.
When conversations about tax evasion and tax efficiency take place, the topic of intra-group transactions is one that is brought up rather frequently as a topic of discussion. Now that we've gotten that out of the way, let's concentrate on the constraints that are already in place so that we can have a better understanding of the situation from the point of view of the French people.
Transfer pricing is a sophisticated web that has to be explored by multinational corporations (MNCs) in light of the continuously shifting worldwide tax landscape. To get things started, France is in agreement with the Transfer Pricing Guidelines that were developed by the OECD in the year 2000.
The arm's-length principle needs to be adhered to in all transactions that take place inside a group, and the objective of these rules is to ensure that this does not take place by preventing it from happening in the first place. This idea may be summed up in a single, straightforward premise, which is that the pricing for intra-group transactions should be regarded as though they were carried out between separate organizations.
This is the simplest way to express the notion. The entirety of this idea may be encapsulated in a solitary, uncomplicated concept.
In addition to this, the government of France requires businesses to provide voluminous paperwork that details the transfer pricing procedures that they employ. This is a mandatory requirement. In the case that this documentation does not meet the fundamental criteria, or if it is found to be non-compliant, there will be monetary readjustments put into place.
Nevertheless, multi-national corporations that operate in France face a variety of obstacles in the course of their economic activities there. Even the simplest mistake might result in a substantial amount of financial penalties due to the fact that French tax inspectors maintain such a thorough watch on everything.
When businesses opt to disobey these regulations, they put themselves in peril of having to pay monetary fines on top of the interest that has built over the period of time because they are in violation of these regulations.
What can we expect with regard to the course that transfer pricing will take in France moving ahead, and why is this important?
When the Base Erosion and Profit Shifting (BEPS) regulations, which were created by the OECD and will eventually be put into force, there will be a paradigm change in the way that intra-group transactions are viewed as having occurred, and this shift will occur in the way that intra-group transactions are regarded as having occurred. In accordance with the commitment it made to the BEPS, France is getting ready to implement a regulatory regime for the transactions in issue that is much stricter than the one that was mentioned above.
In conclusion, it is essential to emphasize the fact that multi-national corporations (MNCs) that have their sights set on establishing themselves in France confront a variety of obstacles along the route to achieving their goal of settling there. Transfer price is not an issue that can't be handled, despite the fact that finding a solution might be challenging.
In order to ensure a smooth navigation, multinational corporations (MNCs) need to do nothing more than keep up with the ever-changing regulations, continually analyze their internal strategy, and consult with legal advice. Everything, in the end, comes down to careful preparation, having a well-thought-out strategy, and putting that strategy into action with pinpoint accuracy.
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Contact:
SSA (Sassi Bar Association)
Mr Sassi, lawyer laundering tax fraud
Lawyer laundering international tax evasion 32 avenue Carnot – Paris 17e - France
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Europol – European Union (EEC)
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Financial crime – Enforcement Network – US Treasury – United States of America (USA)
Code Générale des impôts (France)
https://www.legifrance.gouv.fr/affichCode.do?cidTexte=LEGITEXT000006069577
Ministère du budget - Doctrine administration fiscale (France)
https://www.impots.gouv.fr/portail/recherche/code
https://bofip.impots.gouv.fr/bofip/1-PGP.html
Ministère de l’économie et des finances
Fiscalité des entreprises – Ministère du budget
https://www.impots.gouv.fr/portail/international-professionnel/fiscalite-des-entreprises
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