BEPS France Profile

July 2016


1) Has France implemented any BEPS recommendations? If so, which Action Items?
Most of the BEPS recommendations have already been implemented in France or will be in the near future:
  • Actions 1, 5, 6, 7: Will be implemented, primarily depending on multilateral actions;
  • Action 2: Mostly implemented (anti-hybrid);
  • Action 3: Already implemented (CFC);
  • Action 4: Already implemented (thin capitalization and many measures on interest deductibility in France are already in force);
  • Actions 8-10: Already taken into account in France, for transfer pricing audits;
  • Action 13: Implemented in the frame of the FY 2016 finance law.
2) What is France’s expected timeline for implementing country-by-country reporting?
Country-by-country reporting is already implemented in the frame of the finance law for 2016.

3) If France has already implemented CbC, what has been the reaction from taxpayers?
It depends on the taxpayer, but some would be interested in doing an “internal” country-by-country report for FY 2015 and identifying in advance potential risks areas. Generally, our clients are less inclined to aggressive tax planning and are globally willing to secure their tax policy.

4) If France has already implemented CbC, what challenges are taxpayers facing or anticipated to face?
We have not received a lot of feedback at this stage. Difficulties are usually related to the collection of data, accounting standards, and reviewing their own transfer pricing policy and, more widely, their global tax management.

5) Are France’s taxing authorities taking any measures to prepare for any changes brought about by BEPS (e.g., changes in staffing, increases in budgets)?
France’s tax authorities are hiring more staff to address international tax issues. There are also more transfer pricing audits. The tax authorities have not increased their budget, but have rather focused on reallocating and educating existing tax inspectors on international/transfer pricing issues vs. traditional tax audits.

6) How will country-by-country reporting affect how you provide services to your clients?
We now advise our clients on the risks resulting from adopting certain measures, and on reviewing their global tax management. Country-by-country reporting also provides the opportunity to realign clients’ transfer pricing policy with good practices in the frame of the BEPS environment.