The emphasis is on respecting the principle of arm length on the basis of transactions per transaction. As a result, transaction-based methods are preferred (another difference with the United States). In France as in Europe, uncontrolled price, cost-plus (CP) and resale-less methods (MMR) are generally used (over 80%), unless they prove imprecise. Only then are profit-sharing methods and comparable profit-sharing methods used, while U.S. multinationals generally prefer the comparable profit method in accordance with Section 482 of the Cree. However, in our experience, the use of a profit level indicator to verify transfer pricing policy is increasingly accepted and may even have access to it. Companies are generally controlled by accountants who specialize in the area of the activity of the tax payers. The ESTV can set up an IT task force. The task force is allowed to sneak into the tax system to recover all information, French or not, considered to affect the taxpayer`s taxable LP.
It is therefore advisable to appoint a staff member to provide the requested data to the computer examiner in order to prevent direct access to the computer auditor. Intranet systems should, where possible, prevent access to operations abroad. An international control team with the ESTV (30th Brigade) may also be involved. He is very familiar with international transfer pricing issues. APAs should apply for three to five years. Although an APA normally begins the application year, it can apply for the filing year. The free trade agreement is flexible. In some cases, a withdrawal may be agreed with the taxpayer, provided the tax authorities accept the other jurisdiction. Clearly, the MNEs see the APA program as the best way to prevent tax controls not only for the future, but also for years past. As a result, MINNEs may also want to obtain APAs for previous years, whether or not they are reviewed. The main benefits of an APA include: – the prevention of tax controls for APA-covered transactions (reducing costs and related efforts) and eliminating any transfer pricing adjustments: – removal of late interest and penalties for possible transfer pricing adjustments; Eliminating the costs of establishing the transfer pricing record for APA-covered transactions (during the period during which the APA is in effect); Avoid double taxation. While three years could be considered a long delay, a binding resolution to the POP tax treaty, which solves a problem and does not reduce double taxation, seems to be a big step forward.
22 It may also be favourable in relation to the time required for a final decision; in France, it takes about 10 years. Since France does not offer a “fast-track” APA, taxpayers should balance APA with arbitration. Even if the tax authorities of the Member States wish to cooperate, multilateral APA still does not have an EU legal framework, which is often complex and likely to create difficulties due to differences between countries` APP programmes. On the other hand, an APA guarantees security and allows taxpayers to approach transfer pricing issues effectively and business-orientedly. If the parties fail to reach an agreement within two years of the company`s request, an advisory committee is established within six months and adopts an advisory decision. The subject may appear before the advisory committee.