The French Supreme Administrative Court provides useful clarifications on the deduction of government subsidies from the cost base in applying cost-based transfer pricing methods Caroline Silberztein and Benoit Granel
By: Silberztein, Caroline
.
Contributor(s): Granel, Benoît.
Material type: 
ArticlePublisher: 2019Subject(s): PRECIOS DE TRANSFERENCIA | DEDUCCIONES TRIBUTARIAS | SOCIEDADES EXTRANJERAS | FRANCIA | UNION EUROPEA | TRIBUNAL DE JUSTICIA DE LAS COMUNIDADES EUROPEAS | JURISPRUDENCIA
In:
International Transfer Pricing Journal v. 26, n. 1, January/February 2019, p. 65-69Summary: In a decision dated 19 September 2018 (Philips France SAS), the French Supreme Administrative Court ruled that, in the context of contract R&D services provided by a French taxpayer and charged at cost-plus to a foreign associated enterprise, the deduction of government subsidies from the cost base does not by itself suffice to characterize a transfer of profits abroad. This decision, which is final, as it cannot be appealed, puts an end to the Philips France SAS litigation case that started in 2014 with a contrary decision by a French Administrative Tribunal. It provides useful clarifications on the application of the cost-plus method and clarifies the rules concerning the burden of proof in transfer pricing matters.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Recursos electrónicos | IEF | IEF | ITPJ/2019/1-7 (Browse shelf) | Available | ITPJ/2019/1-7 |
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Resumen.
In a decision dated 19 September 2018 (Philips France SAS), the French Supreme Administrative Court ruled that, in the context of contract R&D services provided by a French taxpayer and charged at cost-plus to a foreign associated enterprise, the deduction of government subsidies from the cost base does not by itself suffice to characterize a transfer of profits abroad. This decision, which is final, as it cannot be appealed, puts an end to the Philips France SAS litigation case that started in 2014 with a contrary decision by a French Administrative Tribunal. It provides useful clarifications on the application of the cost-plus method and clarifies the rules concerning the burden of proof in transfer pricing matters.
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