France v. ST Dupont

France v. ST Dupont

Jurisdiction

France, French Tax Authority (le fisc)

Summary of Facts

ST Dupont faced pricing adjustments following an audit, with allegations that the prices at which it sold merchandise to its Hong Kong subsidiary were below the arm’s length level.

Key Issues

The investigation focused on whether the royalty rates and transfer prices between ST Dupont and its subsidiary were compliant with the arm’s length principle.

Decision and Reasoning

The Paris Administrative Court of Appeal upheld the tax adjustments, dismissing ST Dupont’s appeal.

Importance and Implications

This case highlights the stringent enforcement of transfer pricing rules by French authorities and the importance of aligning intra-group transactions with market rates.