Worldwide transfer pricing reference guide 2014

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France (continued) Frequency of tax audit and transfer pricing scrutiny by the tax authority The risk of a general tax audit is high, as is the risk that transfer pricing issues will be scrutinized during the audit. Similarly, if transfer pricing is reviewed as part of the audit, the likelihood that the transfer pricing methodology will be challenged is high. The number of tax audits in transfer pricing is increasing considerably, and the FTA are becoming more extensive and accurate in its queries, since they now use economic bases, as well as legal bases. Transfer pricing issues that receive the greatest scrutiny are. • Business restructurings (e.g., transfer of intangibles and of clientele, indemnity) or a sudden decrease into the operating margin likely to hide a change in the transfer pricing policy applied • Product sale prices (under or overestimated prices), especially, but not only, in case of losses • Management fees • Agents and commissionaire operations (e.g., conversion of a distributor into an agent) • Permanent establishments • Closure/conversion costs • Intangibles and economic ownership (including questions about royalties) • Benchmarking exercises (the FTA expect a search made on French databases when the tested party is French and usually reject pan-European searches) As an alternative to transfer pricing dispute, the FTA today are keen on making a permanent establishment characterization and do not hesitate to resort to judicial searches in instances where the FTA feel that auditors cannot access information via normal investigative procedures. Other tax audit trends: • Huge increase in the implementation of police tax raids lead by the FTA (based on Article L16B FPTC) • Development of computerized tax audits • For certain taxpayers: New obligation to provide a file detailing all the accounting entries (article L 47 A 1), i.e., accounting records in the form of an accounting entry file (AEF). This obligation includes the provision of 18 compulsory fields. The non-disclosure of the AEF complying with French requirements may imply the application of penalty of EUR1,500. Communication of the analytical and consolidated accounts in case of a tax audit: After enactment of the French 2014 Finance Bill (i.e., 31 December 2013), companies in the scope of L13AA of the FPTC or with a turnover exceeding €152.4m or €76.2m depending on their business activity will have to communicate their management accounting in case of an audit. The precise definition of the management accounting should be further clarified in future additional regulatory guidance. French holdings will also have to disclose details of their consolidated accounts, allowing the FTA to identify, for instance, the tax provisions. Currently, the penalty for a failure to comply with these provisions will be limited to €1,500. There are rather few court decisions in France going into detailed transfer pricing issues. One of the main questions relates to the burden of proof, which is usually said to rest with the tax inspectors. APA opportunity Bilateral and, under certain circumstances, unilateral, APAs are available (Article L 80 B 7° of the FPTC). No fees are required. This section was provided by the Finance Amendment Act for 2004 and came into force as of 1 January 2005. It incorporates existing procedures as described by the French administrative guideline #4 A-8-99, dated 7 September 1999. A specific procedure also exists for certain activities (e.g., headquarter profile). On 28 November 2006, the tax authorities released a new administrative guideline (former 4 A-13-06 referred under BOI-SJ-RES-20-20 from September 2012), adding a simplified APA procedure for small and medium-sized enterprises, and presenting an online guide pertaining to transfer pricing methods. In theory, the process requires the request to be submitted at least six months before the beginning of the first fiscal year covered. There is no rollback possibility. Worldwide transfer pricing reference guide 110
France (continued) Expected reaction to OECD Report on BEPS There is a new obligation to provide accounting statements and consolidated accounts in case of tax audit (see section Audit risk/ transfer pricing scrutiny) which is a direct implementation of a type of country-by-country reporting. It is too early to anticipate any further reaction. Worldwide transfer pricing reference guide 111
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Worldwide Transfer Pricing Referenc
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Worldwide transfer pricing referenc
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Nigeria 215 Norway 217 Oman 220 Pak
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The content is current as of 28 Feb
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CUP (comparable uncontrolled price)
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Albania (continued) Priorities/pric
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Algeria Taxing authority and tax la
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Algeria (continued) Return disclosu
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Angola (continued) Transfer pricing
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Argentina Taxing authority and tax
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Argentina (continued) Transfer pric
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Australia Taxing authority and tax
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Australia (continued) Priorities/pr
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Australia (continued) Documentation
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Australia (continued) Frequency of
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Austria (continued) Documentation r
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Bahrain Taxing authority and tax la
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Bangladesh (continued) Penalty reli
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Belgium Taxing authority and tax la
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Belgium (continued) Statute of limi
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Bolivia Taxing authority and tax la
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Botswana Taxing authority and tax l
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Brazil (continued) Relevant regulat
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Brazil (continued) Priorities/prici
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Brunei Taxing authority and tax law
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Bulgaria (continued) Transfer prici
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Bulgaria (continued) Return disclos
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Cameroon Taxing authority and tax l
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Canada Taxing authority and tax law
Page 59 and 60: Canada (continued) Documentation re
Page 61 and 62: Chile Taxing authority and tax law
Page 63 and 64: Chile (continued) Return disclosure
Page 65 and 66: China (continued) Documentation req
Page 67 and 68: Colombia Taxing authority and tax l
Page 69 and 70: Colombia (continued) Penalty relief
Page 71 and 72: Republic of Congo Taxing authority
Page 73 and 74: Costa Rica Taxing authority and tax
Page 75 and 76: Croatia Taxing authority and tax la
Page 77 and 78: Croatia (continued) Frequency of ta
Page 79 and 80: Czech Republic Taxing authority and
Page 81 and 82: Denmark Taxing authority and tax la
Page 83 and 84: Denmark (continued) Documentation d
Page 85 and 86: Dominican Republic Taxing authority
Page 87 and 88: Dominican Republic (continued) Expe
Page 89 and 90: Ecuador (continued) Priorities/pric
Page 91 and 92: Ecuador (continued) Return disclosu
Page 93 and 94: Egypt Taxing authority and tax law
Page 95 and 96: Egypt (continued) Frequency of tax
Page 97 and 98: El Salvador (continued) Transfer pr
Page 99 and 100: Estonia Taxing authority and tax la
Page 101 and 102: Fiji Taxing authority and tax law T
Page 103 and 104: Fiji (continued) Frequency of tax a
Page 105 and 106: Finland (continued) Documentation r
Page 107 and 108: France (continued) Transfer pricing
Page 109: France (continued) Documentation re
Page 113 and 114: Gabon (continued) Transfer pricing-
Page 115 and 116: Georgia (continued) Documentation r
Page 117 and 118: Germany Taxing authority and tax la
Page 119 and 120: Germany (continued) For late filing
Page 121 and 122: Ghana Taxing authority and tax law
Page 123 and 124: Ghana (continued) APA opportunity T
Page 125 and 126: Greece (continued) Transfer pricing
Page 127 and 128: Guatemala Taxing authority and tax
Page 129 and 130: Honduras Taxing authority and tax l
Page 131 and 132: Hong Kong (SAR) Taxing authority an
Page 133 and 134: Hong Kong (SAR) (continued) APA opp
Page 135 and 136: Hungary (continued) Priorities/pric
Page 137 and 138: Hungary (continued) Documentation r
Page 139 and 140: Iceland Taxing authority and tax la
Page 141 and 142: India Taxing authority and tax law
Page 143 and 144: India (continued) Documentation req
Page 145 and 146: Indonesia Taxing authority and tax
Page 147 and 148: Indonesia (continued) Frequency of
Page 149 and 150: Ireland Taxing authority and tax la
Page 151 and 152: Ireland (continued) Frequency of ta
Page 153 and 154: Israel (continued) Priorities/prici
Page 155 and 156: Italy Taxing authority and tax law
Page 157 and 158: Italy (continued) Transfer pricing
Page 159 and 160: Italy (continued) Frequency of tax
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Japan (continued) Transfer pricing
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Japan (continued) APA opportunity U
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Kazakhstan Taxing authority and tax
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Kazakhstan (continued) Frequency of
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Kenya (continued) Documentation req
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Kosovo (continued) Documentation re
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Kuwait (continued) Documentation re
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Latvia Taxing authority and tax law
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Lebanon Taxing authority and tax la
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Lithuania Taxing authority and tax
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Luxembourg Taxing authority and tax
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Former Yugoslav Republic of Macedon
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Malaysia Taxing authority and tax l
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Malaysia (continued) Frequency of t
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Maldives (continued) Statute of lim
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Malta (continued) Return disclosure
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Mauritius (continued) APA opportuni
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Mexico (continued) Transfer pricing
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Mexico (continued) Return disclosur
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Montenegro (continued) Frequency of
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Morocco (continued) Transfer pricin
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Myanmar Taxing authority and tax la
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Namibia Taxing authority and tax la
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Netherlands Taxing authority and ta
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Netherlands (continued) Statute of
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New Zealand Taxing authority and ta
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New Zealand (continued) Frequency o
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Nigeria Taxing authority and tax la
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Norway Taxing authority and tax law
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Norway (continued) Frequency of tax
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Oman (continued) Frequency of tax a
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Panama Taxing authority and tax law
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Panama (continued) Expected reactio
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Papua New Guinea (continued) Docume
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Peru Taxing authority and tax law T
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Peru (continued) Frequency of tax a
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Philippines (continued) Transfer pr
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Poland Taxing authority and tax law
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Poland (continued) Transfer pricing
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Poland (continued) Return disclosur
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Poland (continued) APA opportunity
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Portugal (continued) Transfer prici
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Portugal (continued) APA opportunit
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Qatar (continued) OECD guidelines t
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Qatar (continued) Return disclosure
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Romania (continued) Documentation r
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Russian Federation Taxing authority
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Russian Federation (continued) Freq
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Saudi Arabia (continued) Transfer p
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Senegal (continued) Documentation r
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Serbia Taxing authority and tax law
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Singapore Taxing authority and tax
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Singapore (continued) Frequency of
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Slovak Republic (continued) Documen
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Slovenia Taxing authority and tax l
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Slovenia (continued) Transfer prici
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South Africa (continued) Penalty re
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South Korea (Republic of Korea) Tax
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South Korea (Republic of Korea) (co
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Spain (continued) Penalty relief So
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Spain (continued) APA opportunity T
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Sri Lanka (continued) Return disclo
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Sweden (continued) Documentation re
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Switzerland Taxing authority and ta
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Taiwan Taxing authority and tax law
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Taiwan (continued) Return disclosur
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Tanzania Taxing authority and tax l
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Thailand Taxing authority and tax l
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Thailand (continued) Frequency of t
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Turkey (continued) Priorities/prici
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Uganda Taxing authority and tax law
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Ukraine Taxing authority and tax la
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Ukraine (continued) Transfer pricin
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United Kingdom Taxing authority and
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United Kingdom (continued) Transfer
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United States (continued) Transfer
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Uruguay Taxing authority and tax la
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Uruguay (continued) APA opportunity
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Venezuela Taxing authority and tax
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Venezuela (continued) Expected reac
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Vietnam (continued) Relevant regula
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Vietnam (continued) Documentation d
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Zimbabwe Taxing authority and tax l
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Zimbabwe (continued) Relevant regul
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Transfer pricing contacts Area cont
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Jurisdiction contacts • El Salvad
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Jurisdiction contacts • Rep. of C
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Worldwide transfer pricing reference guide 2014

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