FRANCE TRENDS AND DEVELOPMENTS Contributed by: Caroline Silberztein, Benoît Granel, Jean-Baptiste Tristram and Laura Nguyên-Lapierre, Baker McKenzie
Dispute resolution Progress in mutual agreement procedures Based on OECD mutual agreement procedure (MAP) statistics for France, 490 MAP cases were closed in 2023, among which 284 were transfer pricing cases. Among MAP cases started on or after 1 January 2016, the average time needed to close transfer pricing cases was 33.7 months in 2023. This compares with the OECD aver - age resolution time among all jurisdictions of 32 months for transfer pricing cases in 2023. This progress has been recognised internation - ally, with France winning several MAP awards in 2023. The MAP awards of the OECD recognise jurisdictions that have excelled in resolving inter - national tax disputes through efficient and effec - tive collaboration, demonstrating adherence to international tax standards and fostering better dispute resolution practices. Notably, France and Canada won the collaborative award for the most effective handling of their joint caseload for transfer pricing cases, followed by France and Sweden in second place. Additionally, France won the award for the greatest increase in cases closed, with 212 more cases closed with unilat - eral relief or full agreement in 2023 compared to 2022, among which 137 were transfer pricing cases. However, according to the French competent authorities, fewer MAP cases were closed in 2024 compared to 2023. Despite this decrease, the French competent authorities consider that the cases closed in 2024 encompassed more significant issues, indicating a focus on resolving more complex disputes. Dispute resolution within the EU For cases involving EU member states, the Euro - pean Commission provides 2023 statistics for MAP under the Arbitration Convention, and for
Dispute Resolution and Prevention in France Effective dispute resolution, including the elimi - nation of double taxation, is crucial in transfer pricing matters to ensure the appropriate appli - cation of international tax standards. Equally important is dispute prevention, which aims to increase tax certainty through proactive meas - ures. Recent years have seen significant pro - gress in both areas in France, as reflected by available statistics and the initiatives undertaken by the French authorities outlined below. As part of the fight against all forms of pub - lic finance fraud, in 2023 the government announced a strengthening of the tax authori - ties’ powers in transfer pricing matters, a reform effectively introduced in the 2024 Finance Bill. In return for extended reporting obligations for multinational enterprises (MNEs), a substantial reinforcement of General Directorate of Public Finances ( Direction Générale des Finances Pub- liques DGFIP) teams was announced to reduce processing times for advance pricing arrange - ment (APA) requests and simplify their man - agement. In practice, this resulted in the recent creation of several new case analyst positions, as well as in the upcoming creation of a new team manager position. This enhancement has allowed for more efficient handling of cases and a significant increase in the resolution rate of disputes. It can be expected that these posi - tive trends will persist as the French competent authorities continue to focus on improving and streamlining processes. The following section first describes trends related to dispute resolution, followed by those concerning dispute prevention.
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