The Valuation of Marketing Intangibles in Transfer Pricing: The French SACLA Case

In the case France v. SA SACLA (CAA Lyon, 6 July 2023, Case No. 22LY03210), the Lyon Administrative Court of Appeal set aside a historical cost-based valuation of intangibles and adopted instead the discounted cash flow analysis of the court-appointed expert. The value of an intangible, the court held, lies in the future benefits it is expected to generate rather than in past expenditure. This article examines the SACLA judgment, situates it within comparative jurisprudence, including Facebook v. Commissioner in the United States and recent rulings in the Netherlands, Denmark and Germany, and analyses its broader implications for transfer pricing practice. The judgment confirms a growing convergence towards income-based valuation, without resolving the tension over how courts should weigh expert evidence.