Tax control of multinationals: Strengthening transfer pricing control
Strengthening the control of transfer prices of multinational enterprises
Tax control of multinationals is a major strategic issue for the French tax administration. Article 116 of the Finance Act for 2024 strengthens the tools for detecting and punishing abusive transfer pricing practices, as part of an approach to compliance with OECD international standards and to combat erosion of the tax base.
The tax administration published its official comments on December 12, 2025 under the title:
BIC – CF – INT – Strengthening the control of transfer prices of multinational enterprises (Act No. 2023-1322 of 29 December 2023, art. 116).
Transfer pricing and its tax implications
Transfer pricing refers to the financial conditions applied to transactions between entities of the same multinational group, whether they are sales of goods, services or transfers of intangible assets. These prices must be fixed in accordance with the arm's length principle, as if they had been negotiated between independent undertakings.
Tax control of transfer prices aims to prevent artificial transfers of profits to low-tax jurisdictions, which would reduce the tax base in France.
Key measures under Article 116 of the Finance Act for 2024
Article 116 strengthened the administrative capacity to control transfer pricing documentation:
- The threshold for triggering the documentary obligation was lowered to EUR 150 million in annual non-tax turnover, extending the scope to mid-size enterprises.
- The minimum amount of the fine for failure to submit the documentation shall be EUR 50 000 per financial year.
- The documentation provided to tax services becomes effective against the company.
Intangible assets difficult to assess
For intangible assets difficult to assess, Article 116 provides:
- A procedure for adjusting the value of assets after intra-group transfer in accordance with OECD rules.
- An extension of the administrative recovery period for these operations, strengthening the control capacity over several financial years.
- An exception to the guarantee of non-renewal of an accounting check in the event of application of the extended recovery period, allowing the administration to continue audits targeted at complex transfers.
Consequences for enterprises
These measures reflect the desire of the tax administration to strengthen its control and sanction capacity, while providing a clear and structured framework for companies to comply with their obligations.
For international groups, this implies:
- An increase in documentary and reporting obligations;
- Strengthening the need for sound fiscal governance and accurate traceability of transfer prices and methods used;
- Increased exposure to tax relief and sanctions;
- Longer, heavier and more technical international tax controls.
Documentation
Link to Bofip news
https://bofip.impots.gouv.fr/bofip/14306-PGP.html/ACTU-2024-00140
Related documents
- BOI-BIC-BASE-80-10-10: Indirect transfer of profits abroad between dependent companies – Definition and principles of transfer pricing.
- BOI-BIC-BASE-80-10-40: Indirect transfer of profits abroad between dependent companies – Documentary obligation allowing control of transfer prices.
- BOI-BIC-BASE-80-20: Indirect transfer of profits abroad between dependent companies – Control and procedure for challenging transfer pricing.
- BOI-CF-CPF-30-40-30-20: Declaration of Cross-Border Devices – Clarifications on General and Specific Markers – Specific Markers Related to Cross-Border Transactions, Concerning Automatic Exchange of Information and beneficial owners and Transfer Pricing.
- BOI-CF-IOR-60-50: Procedures for rectification and taxation of office – Specific control procedures – Control of transfer prices.
- BOI-CF-PGR-20-40: Prescribing the right to take over the administration and guarantees of the taxpayer – Guarantees applicable to the exercise of control – Unable for the administration to renew an accounting audit or an accounting review already performed for a tax or a specified period.
- BOI-CF-INF-20-10-40: Offences and penalties specific to direct taxes and similar taxes – Penalties relating to breaches of documentary and declaratory obligations in respect of transfer pricing.
- BOI-INT-DG-20-50-20: Non-cooperative states and territories – Provisions applicable to residents of France carrying out transactions with a non-cooperative state or territory.
Lawyer specializing in tax control and tax litigation of companies of international dimension
Our firm specializes in the control and litigation of international companies. We assist our clients in tax controls and transfer pricing disputes, securing their intra-group practices and defending their positions before the administration and the competent courts.
Thanks to our expertise, we allow companies to reduce the risk of recovery and optimize the tax management of their international operations, while ensuring full compliance with legal and regulatory obligations.
