French Constitutional Court on DPT and country-by-country reporting

Published: 24 January 2017


The French Constitutional Court has issued two important opinions on legislation introducing a diverted profits tax (DPT) and public country-by-country reporting (CbCR). In relation to DPT, the Court considered that “the power to decide which legal persons would be in-scope of the new tax could not be delegated to the tax administration. This power belongs to the legislator and cannot be exercised by the tax administration as such”. 

The Court also criticised proposals to make public information in transfer pricing documentation and CbCR, finding that “the obligation imposed on certain entities to make public economic and tax indicators with regard to their activities on a country-by-country basis, will allow other operators that participate in those markets or exercise their activities (in particular to its competitors), to determine the essential elements of their industrial and commercial strategy. Such obligation is contrary to entrepreneurial freedom and constitutes an infringement manifestly disproportionate to the objective pursued”.

For further information, please contact Paul Hale or Enrique Clemente.