In this latest edition of Face au Droit Fiscal, Laura-Jane Gautier interviews Anne-Dauphine CAMBOURNAC, Tax Affairs Delegate at Syntec Numérique, and Alain RECOULES, Partner at Arsène Taxand.
Today’s topic: Transfer pricing.
What is transfer pricing? What type of transactions does it cover? What is the documentary obligation and to whom is it addressed? Do countries agree on an arm’s length price? Aren’t documentary requirements and legislation too burdensome, and do they prevent companies from going international? What about the tendency for companies to reveal their tax optimization schemes?
Our experts answer all these questions in this video.
<p>Program produced by Décideurs TV. August 2014. </p>rn
This Face au Droit Fiscal episode covers prices charged between related companies belonging to the same international group. In digital business, intragroup operations may involve licences, support functions, software development, intellectual property and shared services.
The arm’s-length principle requires an economically credible explanation of how transactions are priced. Companies should document functions, assets and risks as well as the contracts and financial evidence supporting their methods. Reporting obligations and the legal context have evolved since the programme was recorded.
Financial and tax measures must be understood in their correct legal and accounting context. Businesses should confirm which entities are eligible, the years concerned, the required documentation and any limits or exceptions. In international groups, coherence between contracts, actual functions and financial records is particularly important. A historical policy discussion can explain why rules were proposed, but it cannot establish the treatment of a present transaction. Specialist review is appropriate where the amounts or cross-border implications are significant.
