Transfer Pricing
This article, first published in Transfer Pricing Forum (05/13),
and written by Partner Julien Monsenego, looks at the recent
Base Erosion Profit Shifting debates and how they affect
Tech/Internet compared with other companies
worldwide, using the French tax perspective.
07 May 2013
Transfer Pricing
Firstly, an amendment to the transfer pricing policy must be
agreed by all parties to the operations otherwise the revised
policy would not be legally binding nor applicable. Secondly, the
Administrative Court of Paris interprets a transfer of cash pooling
activity within a multinational group, without compensation, as an
indirect transfer of profits which falls within the scope of TP
rules. Thirdly, in order to determine the interest rate to be
charged to a subsidiary, thin capitalisation rules take into
account the notion of standalone creditworthiness and "market"
rates. Finally, the latest case law refers to operations which look
like commercial arrangement within a group, for which companies
must demonstrate the arm's length nature of the pricing.
03 May 2013
Tax
It is usually easier to challenge the remuneration of French
companies under Transfer Pricing rules rather than characterising a
French PE of a foreign related company, due to the related
technical issues.
26 April 2013
Tax
The Chancellor announced in this year's Budget that he is
"abolishing altogether stamp duty on shares traded on growth
markets such as AIM". However, the Budget document reveals
there is some process to get through before this takes
effect. Specifically, the Government will first consult on
the abolition of stamp duty on shares quoted on growth markets such
as AIM and the ISDX Growth Market, with a view to its abolition in
April 2014.
22 April 2013
Tax
The Court of Appeal has handed down its keenly anticipated
judgment in a landmark case on the recoverability of VAT on deal
fees relating to corporate takeovers.
22 April 2013
Tax
Transfer prices are adjusted by French Tax Authorities under the
provisions of the French Tax Code, with clear reference to the OECD
Guidelines. Transfer pricing rules provide a specific documentation
from larger companies with two categories of information. In case
of audit, two different procedures could be carried out by the FTA
along with a non jurisdictional procedure ("MAP") and the APA
procedure.
26 March 2013
To demonstrate the existence of the PE, the French Tax
Authorities use the definition provided by tax treaties thanks to
the concept of "fixed place PE" and "agency PE". Once, the
existence of the PE is achieved, the FTA allocate profits according
to two methods: "Authorised OECD approach" based on what the PE
would have earned if it was a distinct and separate company, or on
the amount of revenue that at arm's length the PE would have
created.
26 March 2013
Tax
For profit allocation rules, the
French Tax Authorities use the OECD approach thanks to "PE report"
in order to determine if there is a "fixed place of business PE" of
the foreign company in France. Presence of employees of the foreign
company and the nature of functions located in France may be
criteria of a French PE according to the FTA.
26 March 2013
Tax
Olswang's award-winning team will be discussing the 2013 Budget
on the Olswang Tax blog today.
20 March 2013
Tax
According to the Administrative Court of Paris, a French company
which transfers a cash pooling activity from France to another
country within the same group carries out an indirect transfer of
benefits when there is no compensation paid to the French
company.
20 March 2013
Tax
Since 2011, companies must prepare a transfer pricing
documentation from the start of the the tax audit. On the case law
front, the French Supreme Court ruled that French mechanism
sanctioning indirect transfer pricing (Section 57 of the FTC) is
constitutional. In addition, four important cases law have dealt
with the burden of the proof in a TP context or abnormal act of
management for deduction of expenses prior to an acquisition by a
holding company.
20 March 2013
Tax
French customs authorities amended the guidelines applicable to
customs value in order to apply transfer pricing rules to a
transaction value. In addition, there is some relevant French case
law dealing with allocation of profits when a French branch has a
separate fiscal personality, deductibility of expenses incurred by
an audit of a French company required by the US parent company or
the use of comparables in order to prove that the commission paid
to a French company was too low.
20 March 2013
Television
On 11 December 2012, the Government published the draft
legislation in relation to the proposed new tax reliefs for high
end television programmes and animated television programmes which
will, subject to State Aid approval from the European Commission,
be introduced in the UK with effect from 1 April 2013.
22 February 2013
Litigation
Yesterday the Supreme Court handed down its long-awaited
judgment in R (on the application of Prudential plc and another) v
Special Commissioner of Income Tax and another [2013] UKSC 1.
25 January 2013
Tax
The Government released further details of the proposed new
taxes on UK residential property owned by "non-natural persons" on
Tuesday 11 December 2012.
18 December 2012
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