Countries: France

France vs SAS Blue Solutions, March 2023, CAA, Case N° 21PA06144 & 21PA06143

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SAS Blue Solutions manufactures electric batteries and accumulators for electric and hybrid vehicles and car-sharing systems. In FY 2012-2014 it granted a related party – Blue Solutions Canada – non-interest-bearing current account advances of EUR 42.9 million, EUR 43 million, and EUR 39 million. The French tax authorities considered that the failure to charge the […]

France vs SAS Sames Kremlin, March 2023, CAA de PARIS, Case No 21PA06439

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SAS Sames Kremlin marketed its products abroad through subsidiaries or independent agents, depending on the territory. In Argentina, Brazil, India, Portugal and Russia it sold its products through subsidiaries under either a buy/sell distributor agreement or a commissionaire agreement. In Iran, Turkey and South Korea it sold the goods through independent agents to whom it […]

France vs SA Exel Industries, March 2023, CAA de PARIS, Case No 21PA06438

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SA Exel Industries marketed its products abroad through subsidiaries or independent agents, depending on the territory. In Brazil, India, Argentina, Russia and Portugal it sold its products through subsidiaries under either a buy/sell distributor agreement or a commissionaire agreement. In Iran, Turkey and South Korea it sold through independent agents to whom it paid a […]

France vs Bupa Insurance, December 2022, Conseil d’État, Case No 450796 (ECLI:FR:CECHR:2022:450796.20221221)

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In 2009 a British company – Bupa Insurance Limited – absorbed the Danish company International Health Insurance, whose shares it had acquired in 2005 and which had had a French branch since 1993. Following an audit for FY 2009 and 2010, the tax authorities considered that the French branch had passed on to Bupa Insurance […]

France vs Foncière Vélizy Rose, December 2022, Court of Appeal of Paris, Case No 21PA05986

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This case concerns the application of the beneficial ownership rule to dividends paid by a French corporation to its Luxembourg parent. The Luxembourg parent company was not considered to be the beneficial owner of the dividends because it did not carry out any activity other than the receipt and further distribution of dividends, and it […]

France vs Electricité de France, November 2022, Conseil d’État, Case No 462383 (ECLI:FR:CECHR:2022:462383.20221116)

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In 2009 the English company EDF Energy UK Ltd (EDFE), a wholly-owned subsidiary of SAS Electricité de France International (SAS EDFI), issued 66,285 bonds convertible into shares (OCAs) for a unit nominal value of EUR 50,000. SAS EDFI subscribed to all of these OCAs for their nominal value, i.e. a total subscription price of EUR […]

France vs SA SACLA, October 2022, Conseil d’État, Case No. 457695 (ECLI:FR:CECHS:2022:457695.20221027)

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SA SACLA, which trades in protective clothing and footwear as well as small equipment, was subject of a tax audit covering the FY 2007, 2008 and 2009. In a proposed assessment issued in December 2011, the tax authorities increased its taxable income on the basis of Article 57 of the General Tax Code, by considering […]

France vs Yazaki Systems Technologies France, October 2022, CAA de Versailles, Case No. 20VE02286

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Yazaki Systems Technologies France (SY France) is wholly owned by the German company SY Systems Technologie Europe GmbH, which became Yazaki Systems Technologie Europe GmbH (SY Europe) in 2013 following the acquisition of 100% of its shares by the Japanese parent company that created the group, Yazaki Corporation Japan. The group develops and distributes wiring […]

France vs HCL Maître Pierre, September 2022, Conseil d’État, Case No. 455651 (ECLI:FR:CECHR:2022:455651.20220920)

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On 1 July 2013, HCL Maître Pierre issued a ten-year bond which were convertible into shares and bore interest at a rate of 12%, the accrued amount of which was capitalised annually until the date of redemption or conversion, together with a non-conversion premium at a rate of 3%, if applicable. This loan was subscribed […]

France vs SAP France, September 2022, Conseil d’État, Case No. 461639

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SAP AG (now SAP SE) is a German multinational software corporation that develops enterprise software to manage business operations and customer relations. The company is especially known for its ERP software. SAP France, a 98% subsidiary of SA SAP France Holding, itself wholly owned by the German group, had deposited funds under a Cash Management […]

France vs SA Tropicana Europe Hermes, August 2022, CAA of DOUAI, Case No. 20DA01106

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SA Tropicana Europe Hermes is a French permanent establishment of SA Tropicana Europe, located in Belgium. The French PE carried out the business of bottling fruit juice-based drinks. In 2009, a new distribution contract was concluded with the Swiss company FLTCE, which was accompanied by a restructuring of its business. Before 1 July 2009, Tropicana […]

France vs Ferragamo France, June 2022, Administrative Court of Appeal (CAA), Case No 20PA03601

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Ferragamo France, which was set up in 1992 and is wholly owned by the Dutch company Ferragamo International BV, which in turn is owned by the Italian company Salvatore Ferragamo Spa, carries on the business of retailing shoes, leather goods and luxury accessories and distributes, in shops in France, products under the ‘Salvatore Ferragamo’ brand, […]

McDonald’s has agreed to pay €1.25bn to settle a dispute with French tax authorities over excessive royalty payments to Luxembourg

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On 16 June 2022 McDonald’s France entered into an settlement agreement according to which it will pay €1.245 billion in back taxes and fines to the French tax authorities. The settlement agreement resulted from investigations carried out by the French tax authorities in regards to abnormally high royalties transferred from McDonald’s France to McDonald’s Luxembourg […]

France vs SAS Microchip Technology Rousset, December 2021, CAA of MARSEILLE, Case No. 19MA04336

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SAS Microchip Technology Rousset (former SAS Atmel Rousset) is a French subsidiary of the American Atmel group, which designs, manufactures, develops and sells a wide range of semiconductor integrated circuits. It was subject to an audit covering the FY 2010 and 2011 and as a result of this audit, the tax authorities imposed additional corporate […]

France vs UBS AG and UBS SA, December 2021, CAA of Paris, Dossier No. 19/05566 Arrét No. 192/21

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Swiss banking group, UBS, had set up a system aimed at facilitating tax evasion and money laundering of wealthy French taxpayers. Judgement of the Court of Appeal By judgment of the Paris Court of Appeal dated 13 December 2021, the Swiss parent, UBS AG, was found guilty of banking and financial canvassing and of facilitating […]

France vs Genefinance (Interga), July 2021, Conseil d’Etat, Case No. 434268

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Genefinance – previously Interga – carried out a credit risk guarantee activity for the benefit of certain foreign branches and subsidiaries of the Société Générale group to which it belonged. Following an audit, the tax authorities considered the amount of premiums paid by foreign entities in 2008 and 2009 to be insufficient in relation to […]

France vs SARL Elie Saab France, June 2021, Conseil d’État, Case No 433985

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The French tax authorities had issued an assessment to SARL Elie Saab France in which they asserted that the French subsidiary had not been sufficiently remunerated for additional expenses and contributions to the value of the SARL Elie Saab trademark. The Supreme Administrative Court upheld the decision of the tax authorities. “It is clear from […]

France vs. SMAP, March 2021, Administrative Court of Appeal, Case No. 19VE01161

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The French company SMAP carries out activities in the area of advertising management and organisation of trade fairs. Following an audit of the company for FY 2008 to 2011 and assessment was issued where deduction of costs for certain intra group “services” had been denied, resulting in additional value added tax, corporate income tax surcharges, […]

France vs Bluestar Silicones France, Feb 2021, Supreme Administrative Court (CAA), Case No 16VE00352

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Bluestar Silicones France (BSF), now Elkem Silicones France SAS (ESF), produces silicones and various products that it sells to other companies belonging to the Bluestar Silicones International group. The company was audited for the financial years 2007 – 2008 and an assessment was issued. According to the tax authorities, the selling prices of the silicone […]

France vs Société Générale S.A., Feb 2021, Administrative Court of Appeal, Case No 18VE04115-19VE00405

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Société Générale S.A. had paid for costs from which its subsidiaries had benefited. The costs in question was not deducted by Société Générale in its tax return, but nor had they been considered distribution of profits subject to withholding tax. Following an audit for FY 2008 – 2011 a tax assessment was issued by the […]

Diageo – British multinational beverage and alcohol group – is facing various tax challenges

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Diageo (British multinational beverage and alcohol group – owner of numerus brands including Jonny Walker, Captain Morgan, Gordons Gin, Smirnoff and Guinness) is facing difficult tax challenges according to the group’s August 2020 SEC-filings. During 2017 Diageo was in discussions with UK tax authorities to seek clarity on Diageo’s transfer pricing and related issues, and […]

France vs Valueclick Ltd. Dec 2020, Supreme Administrative Court (CAA), Case No 420174

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The issue in the case before the Supreme Administrative Court was whether an Irish company had a PE in France in a situation where employees of a French company in the same group carried out marketing, representation, management, back office and administrative assistance services on behalf of the group. The following facts were used to substantiate the […]

France vs Sté Paule Ka Holding, December 2020, Paris Administrative Court of Appeal, Case No 18PA02715

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Sté Paule Ka Holding, was set up as part of a leveraged buy-out (LBO) operation to finance the acquisition of the Paule Ka group, and in 2011 it acquired the entire capital of the group a price of 42 million euros. The acquisition was financed by issuing convertible bonds carrying an interest rate of 8%. The French tax […]

France vs WB Ambassador, December 2020, Supreme Administrative Court, Case No 428522

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WB Ambassador took out two loans with its Luxembourg parent company and another group company, each bearing an annual interest rate of 7%. Following an audit, the tax authorities considering that the company did not justify that the 7% interest rate of the above-mentioned intra-group loans corresponded to the rate it could have obtained from […]

France vs Ferragamo France, November 2020, Conseil d’Etat, Case No 425577

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Ferragamo France, which was set up in 1992 and is wholly owned by the Dutch company Ferragamo International BV, which in turn is owned by the Italian company Salvatore Ferragamo Spa, carries on the business of retailing shoes, leather goods and luxury accessories and distributes, in shops in France, products under the ‘Salvatore Ferragamo’ brand, […]

Facebook France has agreed to pay 106 million euros in back taxes and penalties

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The agreement, according to which Facebook France will pay 106 million euros in back taxes and penalties, was reached after French tax authorities had carried out an extensive audit covering FY 2009-2018. Furthermore, Facebook’s French revenues were increased last year after the company decided to include advertising income from French companies in its local accounts, […]

France vs Piaggio, July 2020, Administrative Court of Appeal, Case No. 19VE03376-19VE03377

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Following a restructuring of the Italien Piaggio group, SAS Piaggio France by a contract dated January 2 2007, was changed from an exclusive distributor of vehicles of the “Piaggio” brand in France to a commercial agent for its Italian parent company. The tax authorities held that this change resulted in a transfer without payment for […]

France vs Apex Tool Group SAS, March 2020, Administrative Court of Appeal, Case No 18PA00608

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A intercompany loan had been granted within the Apex Tool group at an interest rate of 6 percent and to demonstrate the arm’s length nature of the interest rate the borrowing company provided a comparability analyses. The analysis was set aside by the tax authorities and an assessment was issued where the deduction of interest […]

France vs SAS Groupe Lagasse Europe, January 2020, CCA de VERSAILLES, Case No. 18VE00059 18VE02329

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A French subsidiary, SAS Groupe Lagasse Europe, of the Canadian Legasse Group had paid service fees to another Canadian group company, Gestion Portland Vimy. The French tax authorities held that the basis for the payments of service fees had not been established, and that there was no benefit to the French subsidiary. The payments constituted […]

Google – Taxes and Transfer Pricing

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Google’s tax affairs are back in the spotlight after filings in the Netherlands have showed that billions of dollars were moved to Bermuda in 2016 using the “double Irish Dutch sandwich”. According to the Washington Post, Google’s cash transfers to Bermuda reached $27b in 2016. Google uses the double Irish Dutch sandwich structure to shield […]

Microsoft – Taxes and Transfer Pricing

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Microsoft’s tax affairs have been in the spotlight of tax authorities all over the World during the last decade. Why? The setup used by Microsoft involves shifting profits from sales in the US, Europe and Asia to regional operating centers placed in low tax jurisdictions (Bermuda, Luxembourg, Ireland, Singapore and Puerto Rico). The following text has been […]

The L’Oréal group announced additional payment of 320 million euros in corporate tax to the French tax authorities to “settle a dispute”

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The French cosmetic group L’Oréal announced in September 2019 that it would pay 320 million euros to the French tax authorities to “settle a dispute” related to the payment of corporate tax for three of its subsidiaries for fiscal years 2014 and 2018. In detail, the charge was 47 million euros for Lancôme Parfums et […]

France vs Google, September 2019, Court approval of CJIP Agreement – Google agrees to pay EUR 1 billion in fines and taxes to end Supreme Court Case

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The district court of Paris has approved a  “convention judiciaire d’intérêt public” negotiated between the French state and Google for an amount of € 500 million plus another agreement with the French tax authorities which amounts to 465 million euros. The agreement puts an end to the French lawsuits against Google for aggressive tax evasion, […]

France, Public Statement related to deduction of interest payments to a Belgian group company, BOI-RES-000041-20190904

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In a public statement the French General Directorate of Public Finance clarified that tax treatment of interest deductions taken by a French company on interest payments to a related Belgian company that benefits from the Belgian notional interest rate scheme. According to French Law, interest paid to foreign group companies is only deductible if a […]

France vs SAS Wheelabrator Group, July 2019, Conseil d’Etat Opinion, No 429426

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In an Opinion issued on 10 July 2019 on request from the Administrative Court of Versailles, the Conseil d’Etat states as a principle that the arm’s length nature of intra-group interest rate can be demonstrated by reference to comparable unrelated transactions, when these loans constitutes realistic alternatives to the intra-group loan. Excerpt from the Opinion “… […]

France vs ST Dupont, March 2019, Administrative Court of Paris, No 1620873, 1705086/1-3

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ST Dupont is a French luxury manufacturer of lighters, pens and leather goods. It is majority-owned by the Dutch company, D&D International, which is wholly-owned by Broad Gain Investments Ltd, based in Hong Kong. ST Dupont is the sole shareholder of distribution subsidiaries located abroad, in particular ST Dupont Marketing, based in Hong Kong. Following […]

France vs SAP Laps SAS, February 2019, Administrative Tribunal of Montreuil, Case No. 1801945

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SAP Labs France SAS provided IT-related services to its German parent company, SAP AG, and received a cost-plus 6 % remuneration. According to the R&D agreement all income taxes, including withholding tax, applied on the amount paid by the parent company pursuant to the agreement would be paid for by the French company. However, the […]

France vs. Apple, Feb. 2019, Settlement on Payment of 571 million Euros in Back Taxes

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Apple has agreed to paid an additional 571 million euros to France in a settlement with the tax authorities. According to the French news agency, l’expansion l’Express – “For several months now, secret negotiations on this subject have been taking place between Apple and the French International Audit Department (DVNI). But it is not until […]

France vs GE Medical Systems, November 2018, Supreme Court – Conseil d’État n° 410779

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Following an audit of GE Medical Systems Limited Partnership (SCS), which is engaged in the manufacturing and marketing of medical equipment and software, the French tax authorities issued an assessment related to the “value added amount” produced by the company, which serves as the basis for calculating the French minimum contribution of business tax provided […]

France vs PetO Ferrymasters Ltd. April 2018, Conseil d’État N° 399884

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The French Supreme Court issued a decision on 4 April 2018, concluding that a permanent establishment (PE) existed in France for purposes of determining nonresident companies’ exposure to French VAT in a case involving a transport commissionaire arrangement. The decisions clarify the criteria for determining whether a service provider will be considered to have sufficient […]

France vs Valueclick Ltd. March 2018, Administrative Court, Case no 17PA01538

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The issue in the case before the Administrative Court of Appeal of Paris was whether an Irish company had a PE in France in a situation where employees of a French company in the same group carried out marketing, representation, management, back office and administrative assistance services on behalf of the group. The following facts were used […]

Disneyland Paris under tax investigation

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French Tax Officials raided Disney’s Paris Office. The tax investigation focuses on a fee that Disneyland Paris paid for use of Disney’s intellectual property. The same payment appeared to be associated with services provided by a U.K. unit tasked with managing “Disney activities in Europe, the Middle East and Africa since 2011,”. The problem, in […]

France vs SAS Cooper Capri, December 2015, CAA de Nantes, Case No 14NT01720

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SAS Cooper Capri’s belongs to the American group Cooper Industries. The Group carries out a parts production and sales activity in the context of two branches, a “construction” branch and an “industry” branch which produces, in particular, cable glands Cooper Capri was subject to an audit at the end of which the administration considered that […]

France vs GE Healthcare Clinical Systems, December 2015, CAA de VERSAILLES, Case No 13VE00965

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During the period from 1 January 2003 to 31 December 2005 all the products marketed by GE Healthcare Clinical Systems (France), a company wholly owned by the American company GE Medical Systems Information Technologies and the exclusive distributor in France of medical equipment produced by the General Electric group, were supplied to it by its […]

France vs Sodirep Textiles SA-NV , November 2015, Conseil d’État, Case No 370974 (ECLI:FR:CESSR:2015:370974.20151109)

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In this decision, the Conseil d’État confirms that Article 57 of the General Tax Code is applicable to any company taxable in France, including a French branch of a foreign company. Under Article 57, where the tax authorities establish the existence of a relationship of dependence and a practice falling within its scope, the presumption […]

France vs. Rottapharm, Jan 2015, CE No 369214

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In the Rottapharm case The French “abnormal management action” principle was invoked. The Court overruled the decision of the tax administration under the principle of non-intervention, which prevents the tax administration from getting involved in company management. The fact that an advertising campaign costs more than the usual amount spent by the majority of companies […]

France vs. Bayerische Hypo und Vereinsbank AG, April 2014, Conseil d’État, Case No. FR:CESSR:2014:344990.20140411

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Bayerische Hypo und Vereinsbank AG (HVB-AG), a banking institution under German law, set up a French branch under the name “HVB-AG Paris” and contributed ten million Deutschmarks to this structure. The French branch also took out loans from the company’s head office or from third-party companies Following an audit of the branch’s accounts, the tax […]

France vs. Eduard Kettner, March 2012, Administrative Court of Appeals of Paris, No. 10PA04193

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Kettner was a French distributor of hunting products. Kettner was charged service fees by it’s German parent company for a range of services including packaging, warehouse and inventory management, IT, management fees etc. The tax administration was of the opinion that the fees had not been determined in accordance with the arm’s length principle and […]

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