French Transfer Pricing Documentation and Reporting: Master File, Local File, Form 2257 and CbCR

France has three principal transfer pricing information regimes: statutory documentation available at the start of an audit, an annual transfer pricing declaration and country-by-country reporting. They overlap, but they do not have the same thresholds, content, timing or purpose.

This guide explains which French entities are concerned, what must be prepared or filed, and why documentation has become a substantive risk-control instrument rather than a compliance exercise.

1. Three obligations, three different functions

Regime	Principal threshold	Timing	Function
Master File and Local File	€150m turnover or gross assets	Available electronically when the audit begins	Detailed justification of the policy and its application
Form 2257-SD	€50m turnover or gross assets	Within six months after the annual tax-return deadline	Annual summary of the group, transactions and methods
CbCR / Form 2258-SD	€750m consolidated revenue	Within twelve months after year-end	Jurisdiction-level allocation of income, tax and activity

Each threshold also operates through specified ownership, control or tax-consolidation relationships. A French entity can therefore fall within a regime even when its own turnover or assets do not meet the headline amount.

Entities below the €150 million documentation threshold are not exempt from the arm’s length principle. During an audit, the administration may use Article L. 13 B of the French Tax Procedures Code to request information on their transfer pricing. Proportionate contemporaneous support remains prudent.

2. Statutory documentation: who is in scope?

Under Article L. 13 AA of the French Tax Procedures Code, the obligation generally applies to a legal entity established in France where:

• its annual turnover excluding tax or gross balance-sheet assets are at least €150 million;
• it directly or indirectly owns more than half the capital or voting rights of an entity meeting that test;
• more than half its capital or voting rights is directly or indirectly owned by an entity meeting that test; or
• it belongs to a French tax-consolidated group containing an entity that meets the relevant conditions.

The test is applied for each audited financial year. A foreign legal entity with a French permanent establishment may also fall within the regime under the rules described by the French tax administration.

Transactions with associated enterprises in a non-cooperative state or territory trigger additional documentation under Article L. 13 AB.

3. The Master File

The Master File provides a group-wide view. Its purpose is to explain where the group operates, how it creates value, how important intangibles and financing are organised, and how profits are allocated across the multinational group.

Its principal sections cover:

• Organisational structure: the legal and ownership structure and the geographical location of operating entities.
• Group businesses: major sources of profit, important supply chains, significant service arrangements, principal markets and material restructurings.
• Intangibles: the group strategy for development, enhancement, maintenance, protection and exploitation, ownership, important agreements and material transfers.
• Intercompany financing: the financing structure, central financing functions and relevant transfer pricing policies.
• Financial and tax position: consolidated financial statements and relevant unilateral APAs or tax rulings concerning the allocation of income between jurisdictions.

A group may organise the Master File by business line where genuinely independent sectors justify that approach, provided all sectors, centralised functions and transactions between sectors remain covered.

4. The Local File

The Local File must move from the group narrative to the French entity’s actual transactions. It should allow the administration to understand the local business, identify the economically significant dealings, reproduce the analysis and reconcile its results to the statutory accounts.

The current French administrative guidance requires the Local File to describe controlled transactions whose amount, aggregated by category for the financial year, exceeds €100,000. The threshold is assessed using the statutory accounts, without offsetting income against expenses or asset acquisitions against disposals. Dealings between a head office and a permanent establishment in another jurisdiction are also covered.

The file should contain, in particular:

• the management structure, business strategy and material restructurings of the French entity;
• the nature, amount and counterparties of each significant category of controlled transactions;
• the relevant intercompany agreements;
• a transaction-specific functional analysis addressing functions, assets and risk control;
• the selected pricing method, tested party where relevant, financial indicator and reasons for the choice;
• the search strategy, comparables, adjustments and financial calculations;
• the conclusion supporting arm’s length pricing; and
• a reconciliation between the transfer pricing calculations and the annual financial statements.

The administration permits a more concise description for qualifying low-value-adding services, but this does not remove the need to identify the services, beneficiaries, allocation keys and pricing approach.

5. Format, language and timing

The documentation must be available electronically on the date the tax audit or accounting examination begins. A late reconstruction is not equivalent to contemporaneous documentation.

• The files may be provided as searchable PDFs; an image-only scanned PDF is not acceptable.
• Data tables must be supplied in a format that permits the administration to verify calculations, sort information and perform its own analysis.
• The documentation is in principle prepared in French. The administration may request a French translation of foreign-language material.
• The Master File, Local File and CbCR should generally be reviewed and updated annually.
• Where business conditions remain unchanged, a comparable search may generally be refreshed every three years, but the comparable companies’ financial data must be updated annually.

These requirements are detailed in the current BOFiP guidance on statutory transfer pricing documentation.

6. Documentation can now be used against the taxpayer

For financial years opened on or after 1 January 2024, French law gives the documentation a direct evidential consequence. Where the method actually applied differs from the method made available in the documentation and that difference changes the result, the difference is presumed to be an indirect transfer of profit under Article 57. The taxpayer may rebut the presumption by proving that no transfer occurred.

The practical consequence is fundamental: the Local File must describe the policy actually implemented, not merely the intended group policy. Year-end true-ups, exceptional transactions, business changes and deviations from contracts must be identified and reconciled before the file is finalised.

For the substantive Article 57 framework, see French Transfer Pricing Rules: Article 57 CGI, Tax Treaties and Documentation.

7. Annual transfer pricing declaration: Form 2257-SD

Article 223 quinquies B of the French Tax Code requires an electronic annual declaration where a French legal entity meets the €50 million turnover or gross-assets threshold, or the specified ownership, control or tax-consolidation tests.

According to the published administrative guidance, an entity may refrain from filing where it has no transactions with associated enterprises established outside France, or where its foreign controlled transactions remain below €100,000 for each transaction category.

Form 2257-SD is due within six months after the deadline for the annual corporate income tax return. For a French tax-consolidated group, the parent files a separate declaration for each group member that is itself within scope.

The declaration is a summary, not a substitute for the Local File. It includes:

• the group’s principal activities, important intangibles and general transfer pricing policy;
• the French entity’s activity and material changes during the year;
• controlled transactions aggregated by category where they exceed €100,000, with the relevant counterparty jurisdictions; and
• the principal pricing methods and any changes during the year.

The amounts come from the statutory accounts. The declaration must therefore be consistent with the ledger, Local File and group information. A formally complete return containing unexplained differences can be more damaging than a visible clerical error.

8. Country-by-country reporting

Under Article 223 quinquies C, a French parent generally files a country-by-country report where it prepares consolidated accounts, controls foreign entities or branches, has consolidated annual revenue of at least €750 million and is not itself held by another entity required to file an equivalent report.

A French subsidiary may have a secondary filing obligation where its foreign parent’s jurisdiction does not participate in the qualifying exchange framework and no acceptable surrogate reporting entity can be demonstrated.

The report is filed electronically, using Form 2258-SD, within twelve months after the group financial year-end. It presents, by tax jurisdiction, revenue, profit or loss before tax, income tax paid and accrued, stated capital, accumulated earnings, employees, tangible assets and the constituent entities and their activities.

CbCR is exchanged automatically with qualifying partner jurisdictions. It is designed for high-level risk assessment and should not be treated as a substitute for a transaction-level transfer pricing analysis.

9. Sanctions

Master File and Local File

If the documentation is missing or incomplete, the administration may issue a formal notice allowing 30 days to produce or complete it. A reasoned written request may obtain an extension, but the total extension cannot exceed two months.

Continued failure may trigger the penalty in Article 1735 ter. For each audited year, the fine may reach the greater of 0.5% of the affected transactions or 5% of the Article 57 profit adjustments relating to those transactions. The minimum is €50,000.

Form 2257-SD

Under the rules currently in force, late or non-filing may attract a €150 fine. Omissions or inaccuracies may attract €15 per item, subject to a minimum of €60 and a maximum of €10,000 for documents due simultaneously. A statutory first-infringement cure may apply where the conditions are met.

Country-by-country report

Failure to file the report within the prescribed period may attract a fine of up to €100,000 under Article 1729 F.

10. A practical annual work programme

1. At the start of the year: confirm the scope of each regime for every French entity and assign responsibilities.
2. During the year: maintain the transaction map, agreements, decision records and segmented financial data.
3. Before year-end: test results against the selected method and document any true-up or departure from policy.
4. At the tax close: reconcile controlled transactions to the accounts and prepare the Local File financial schedules.
5. Before Form 2257: compare the return line by line with the Local File, Master File and statutory accounts.
6. Before CbCR: validate entity mapping, permanent establishments, data sources and jurisdictional totals.
7. Before sign-off: perform a consistency review across contracts, conduct, invoices, accounts, tax returns and documentation.

11. Expert perspective: documentation is an evidence system

A persuasive Local File is not defined by its length. It is defined by whether an informed reader can follow the transaction from the agreement to the operational conduct, from the conduct to the pricing method, and from the method to the accounting result.

The strongest documentation therefore operates as an evidence system:

• legal agreements define the intended relationship;
• operational records show who performed the functions and controlled the risks;
• financial systems identify the relevant transactions and results;
• the economic analysis explains the arm’s length outcome; and
• governance records explain changes, exceptions and corrective adjustments.

A generic group report may describe a policy elegantly while failing to prove what happened in France. Since the documented method can now be invoked against the taxpayer, internal consistency and factual accuracy are more valuable than volume.

Readiness checklist

• Have the €150m, €50m and €750m tests been applied to the correct entities and group relationships?
• Is the cross-border transaction map complete and reconciled to the ledger?
• Are categories above €100,000 identified without impermissible netting?
• Do the Master File, Local File, Form 2257 and CbCR tell a consistent story?
• Does the Local File describe the method actually applied during the year?
• Can the functional analysis be supported by people, systems and decision records?
• Can every economic calculation be reproduced and reconciled to the statutory accounts?
• Are exceptional events and year-end adjustments documented contemporaneously?

Primary sources

• Article L. 13 AA of the French Tax Procedures Code
• BOI-BIC-BASE-80-10-40: statutory documentation
• Article 223 quinquies B: annual transfer pricing declaration
• BOI-BIC-BASE-80-10-30: Form 2257-SD guidance
• Article 223 quinquies C: country-by-country reporting
• OECD Transfer Pricing Country Profile for France, October 2025

---

Current at 30 September 2026. This publication provides general information only and does not constitute legal or tax advice. The applicable entity, financial year, group structure and filing position must be reviewed in each case.