France’s 2015 Finance Bill, enacted on December 29, 2014, increased the penalties applicable in cases of failure to comply with the French transfer pricing documentation rules.
The newly defined penalty for a failure to produce transfer pricing documentation is, for each audited year, to the greater of:
- 0.5% of the amount of the transactions for which documentation has not been provided to the French tax authorities after a formal request.
- 5% of the additional tax assessments based on Article 57 of the French tax code relating to transactions for which documentation has not been provided to the French tax authorities after a formal request.
- The penalty amount cannot be less than €10,000 for each fiscal year under audit.
The new rule is applicable to any tax audit started after January 1, 2015.
