Transfer pricing aspects of intercompany financing transactions in France: Red carpet for credit rating tools?
The French Supreme Court (“Conseil d’Etat”) recently ruled in favor of the taxpayer in a case (CE 22 December 2022, n°446669) where the French taxpayer, Willink SAS, had issued in 2011 two intercompany convertible bonds with 10-year maturities, carrying an annual interest rate of 8%. During the field tax audit, the French Tax Authorities challenged the arm’s length nature of the 8% interest rate on the basis of Articles 39,1,3° and 212.I.a of the French Tax Code, taking the position that Willink SAS did not bring sufficient proof that the 8% interest rate reflected the conditions that the company could have obtained from an independent lender under comparable circumstances.
Find out what Deniz Arikan, partner, Julia Limone and Mathilde Pion, PwC Société d'Avocats, have to say in the Lettre Gestion des Groupes Internationaux in the March 20, 2023 issue of Option Finance.
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