Type: Articles Published
Courts Take Hard Line in Transfer Pricing Disputes
Two French administrative courts of appeal have issued decisions1 affirming transfer pricing reassessments based on economic dependence and on the taxpayer’s failure to meet the burden of proof.
In a case analyzed by the Administrative Court of Appeal in Lyon, the taxpayer (LVD), which manufactures and markets chairs for the disabled, entered into a contract with a Swiss related party, Lifestand International SA (LSI), on January 7, 2003, under which LSI was granted the exclusive distribution of LVD’s products
(except in Germany, where the distribution was carried out through LVD’s subsidiary, and in France, Greece, and Eastern Europe).