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This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
The volume and the pace of the internet transaction make difficult the identification of all parties to an e-transaction. Basic transactions may easily involved 2 or more jurisdictions. As a result it is very difficult to comply with the transfer pricing rules in all the countries involved.
This difficulty is growing over the time due to the rapid changes of the transfer pricing rules applicable to e-commerce.
The analysis of the function performed by every party to the internet transactions must be carefully reviewed in order to select the countries with a material transfer pricing exposure. In our opinion such functional analysis is also a good basis to reach an agreement on the allocation of profit with French tax authorities.
With respect to e-commerce, we consider that the profit split method is very often the best and most affordable transfer pricing method for small and medium business.
For additional information, please refer to Transfer pricing.
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