Taxable Profit - Profits Transferred Abroad

(French General Tax Code, art. 238 A)

Commissions Paid To A Swiss Subsidiary - Payments Too Important Compared To The Services Rendered

According to Article 238 A of the French General Tax Code, the commission paid by a French company to its Swiss subsidiary in charge of the marketing of its goods, which is set up at a 3.5% rate of the amount of the sales cannot be booked as a deductible charge insofar as the activity of the subsidiary involved is limited to the reinvoicing of operations totally performed by the parent company (C.A.A. Nancy, March 6, 1996, no. 93-868 and 93-1013).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be brought about your specific circumstances.