FRANCE LAW AND PRACTICE Contributed by: Caroline Silberztein, Benoît Granel, Jean-Baptiste Tristram, Lionel Ochs and Laura Nguyên-Lapierre, Baker McKenzie
The valuation methods for TP differ from those existing for customs purposes. However, the guidance on customs valuation and TP pub - lished on the French Customs’ website indicates that TP may be used as a valuation method for customs purposes to the extent that the rela - tionship between the parties does not affect the price. Appropriate documentation will be need - ed to support the price of the transaction. Year-end adjustment could impact import price and lead to higher or lower duties. The guidance indicates that in case of TP adjustments, the importer may declare a provisional value at the time of import and request the value be adjusted retrospectively once the final TP is known. Sim - plification exists to avoid retroactively adjusting the customs value declared at the time of import, provided that an adjustment ratio determined with French customs is added to the declared price. In any event, prior authorisation from French customs is required. During the authorisation application process, and in the absence of simplification, French customs collect information from the importer to agree on the provisional value to declare at the time of import, based on the importer’s situ - ation. A financial guarantee will be required to cover the customs duties potentially due until the customs value is declared final. Additionally, French customs may determine, during that pro - cess, whether the TP can be used as the trans - action value to declare goods to customs, or if an alternative method of valuation is required. In addition, following the Court of Justice of the European Union’s ruling on the Hamamatsu case (in which the Court ruled that a transaction value composed of a TP that is subject to a retroactive TP adjustment cannot form the basis of the cus - toms value when it is not known at the time of the
import whether the adjustment would be made up or down), French customs have not amended their policy regarding TP adjustments as they take the view that retroactive adjustments are permissible as long as these have been author - ised prior to import operations. French customs’ position may change once the matter has been discussed at the EU Valuation Committee and the EU member states have agreed on how to implement the judgement. The co-ordination between customs and TP rules considerations is a key topic for taxpayers. Interactions between the rules should be con - sidered, and their evolution carefully monitored. 13. Controversy Process 13.1 Options and Requirements in Transfer Pricing Controversies Administrative Appeal Process Several forums for administrative appeals are available to the taxpayer further to receiving a notice of proposed reassessment: • the chief inspector ( chef de brigade ) has responsibility for the team that has conducted the tax audit operations – they generally monitor the tax audit operations and provide support to the field inspector; • the departmental chief (interlocuteur départe- mental ) has responsibility for all the brigades in a given area; and • the tax committee (commission départementale/ nationale des impôts directs et des taxes sur le chiffre d’affaires ) is only consultative (ie, its opinions do not have bind - ing powers on the tax audit team) – however, a positive opinion can constitute a strong argument before the courts if litigation is initi - ated.
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