Optional in 2025, the charter strengthens mutual commitments to optimise the APA process.

The French tax authorities (DGFIP) published a new Charter governing advance pricing agreements (APAs) to modernise and strengthen the APA framework on 16 April 2025.

This move aligns with the government’s broader efforts to combat public finance fraud while addressing companies’ need for greater certainty in transfer pricing amid rising audit pressure.

An APA is a tax ruling designed to provide legal certainty to companies regarding their future intra-group transactions.

A charter governing relations between companies and the DGFiP in the context of APA requests aims to foster trust-based relationships. Optional in 2025, the charter strengthens mutual commitments to optimise the APA process.

Scope of the APA

Agreements can be unilateral, bilateral, or multilateral with countries that have a tax treaty with France and an operational APA programme.

The APA Procedure

APA Request Process

Before submitting an APA request, companies must contact the French Competent Authority to assess the conditions under which an agreement may be requested and processed.

A formal letter of intent must be submitted at least six months before the start of the first fiscal year covered by the request. For companies with a financial year ending on December 31, the letter must be submitted by June 30 of the previous year. The complete APA request must be submitted no later than two months before the start of the first fiscal year concerned.

The APA request must include at least the following:

General Information

  • List of entities covered by the request (name, address, tax ID);
  • Number and description of the transactions concerned;
  • Type of request (unilateral, bilateral, multilateral);
  • List of other countries involved (if applicable);
  • Desired duration of the agreement and covered fiscal years;
  • Organisational chart of the group with capital structure.

Pre-established Documents

  • Master file of the group (per Article L. 13 AA of the French Tax Procedures Code) for the last three fiscal years;
  • Local file for each covered entity for the last three fiscal years;
  • Parent company tax filings for the last three years.

Transfer Pricing Methodology

  • Description of the proposed methodology;
  • Justification (functional and economic analysis).

Financial Data

  • Spreadsheet detailing financial stakes per transaction and fiscal year;
  • Spreadsheet of the tested entity/entities’ income statement under the proposed method;
  • Benchmarking studies (if any).

Other Required Information

  • Functional currency of each party and currency used for settlements;
  • Details of other APAs obtained by group entities;
  • Description of foreign entities’ accounting methods affecting transfer pricing;
  • Overview of any ongoing or past issues related to transfer pricing methodology (e.g., litigation, pending procedures in France or abroad);
  • Any other relevant information affecting the transfer pricing method or underlying data.

Review of the APA Request

During the review, the French Competent Authority may request additional information, and the taxpayer is expected to respond promptly and cooperatively.

Once the authority has determined its position on the proposed methodology, the negotiation phase begins:

  • Directly with the taxpayer in unilateral cases;
  • With foreign authorities in bilateral or multilateral cases.

In bilateral cases, the French administration keeps the taxpayer informed of progress and may request more documents depending on how discussions evolve.

Outcome of the APA Request

The French Competent Authority is not obliged to reach an agreement. If negotiations fail, the taxpayer will be informed that the request has been closed. Any double taxation resulting from rejected requests may be addressed through a mutual agreement procedure (MAP).

If an agreement is reached, the taxpayer can choose to accept or reject it.

  • Upon acceptance, the taxpayer is protected: the tax authorities cannot challenge the agreed transfer pricing method during the covered period.
  • Upon refusal, any future double taxation may be resolved through MAP.

Confidentiality of APA Information

The French Competent Authority commits not to share any information provided during the APA process with third parties other than the relevant foreign tax authority involved in the agreement.

However, under international agreements (tax treaties, EU directives, OECD mechanisms), some information may be exchanged with the country of residence of the foreign affiliate.

The APA process is independent of any tax audit. A taxpayer undergoing an audit may still submit an APA request for future transactions, and no information will be shared with audit services.