French Proposed Legislation on Transfer Pricing Will Impose Harsh Penalties

The French Tax Authorities have proposed a law that provides French tax auditors with a mechanism to control the transfer prices within multinational corporations. The proposal imposes obligations on a French member of a multinational corporation. The proposed law requires French entities to furnish increased information and documentation on French members of the multinational corporation and on transfer pricing policy. If French tax authorities believe the answers provided are insufficient, they will apply a five percent fine on gross turnover of international operations. Apparently French Government officials have stated that they intend to target this law against U.S. companies?[more]