FRANCE LAW AND PRACTICE Contributed by: Caroline Silberztein, Benoît Granel, Jean-Baptiste Tristram, Lionel Ochs and Laura Nguyên-Lapierre, Baker McKenzie
15.3 Effects of Other Countries’ Legal Restrictions There is no specific legislation regarding the effects of other countries’ legal restrictions. 16. Transparency and Confidentiality 16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes The Department of Economy, Finances and Recovery publishes several reports online, including: • a report on the fight against tax evasion and tax avoidance, available in French only – this report is usually annexed to the Finance Bill and provides useful TP audit outcomes; and • a report on tax ruling activity, available in French only – this report provides useful infor - mation on APAs. The latest statistics provide the following infor - mation on APAs in France: • 51 APA requests were filed in 2023; • 28 APAs were concluded in 2023, against 14 in 2022 and 16 in 2021; and • on average, the conclusion of an APA request takes 37 months (41 months in 2022).
As regards TP audit outcomes, the latest sta - tistics show a decrease in the amounts reas - sessed. In 2023, the amounts reassessed reached EUR2.3 billion, which is a decrease of 31% as compared to 2022. The report also states the following for 2023: • in the 27 most important files, the reassess - ment exceeded EUR20 million, and it exceed - ed EUR100 million in seven of these files; and • 31 cases considered under Article 57 of the FTC relate to transfers to countries or territo - ries offering a preferential tax regime, repre - senting a total of more than EUR130 million – the main jurisdictions involved are Swit - zerland, Luxembourg, Hong Kong, Ireland, Singapore, Malta, Mauritius and the United Arab Emirates. 16.2 Use of “Secret Comparables” In the past, the FTA tended to use secret compa - rables during tax audits. However, this practice is on the decline. This is notably due to court decisions such as the Unilever/Elizabeth Arden ruling (CAA Paris, 7 December 2007, No 05PA02618). This case involved a French entity engaged in the distribu - tion of cosmetics. To challenge the royalty fees paid to controlled entities, the FTA provided licence or distribution contracts with the names of the parties and the brand names hidden. The Court ruled that these comparables were not valid, being anonymous, as it was not possible to check whether the considered brands and perfumes had a comparable notoriety.
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