After disappearing from the draft, the Finance Bill 2018 undergoes revision of the last year’s requirements for transfer pricing documentation and brings in some additional changes to the requirements:
- Failure within the ambit of the requirement requires companies to submit a tax administration with a two-fold document consisting of a master file and a Local File.
- Preparation of benchmark studies for supporting the arm’s length nature of the intercompany transactions undergoing documentation is mandatory.
However, the penalties haven’t been revised by the new requirement so it remains what it was. The new requirement is applicable since 1st January 2018 which means taxpayers can still document the fiscal years that are open to tax audit based on previous format and content, though it is highly recommended that to go according to these newly introduced requirements.
Although, further guidelines will be needed in the future, France leaves some sinkholes on matters regarding the drafting of files or the materiality threshold to consider important transactions, they do climb up one step upwards the ladder regarding BEPS implementation program.
