The Profit Split Method across Jurisdictions – Report on France

Although the profit split method (PSM) is a valid transfer pricing method in France, neither the legislation, nor the administrative doctrine provides detailed rules on its application and the case law is limited. As a result, taxpayers must rely on the OECD principles and practice. However, the PSM is more frequently applied. Tax audit teams often use it to test the consistency of a transfer pricing method and, in some cases, try to recharacterize the method applied by the taxpayer. The PSM is also frequently used in the context of APAs; accordingly, where this method is applied, it may be advisable to request an APA. This article is part of a special issue of the International Transfer Pricing Journal on the application of the PSM across jurisdictions. The other articles include the General Report and contributions on Belgium, Germany, Ireland, Italy, Korea, the Netherlands, Portugal, Spain and the United States.