The annual transfer pricing return (form 2257-SD) must be submitted electronically within six months following the corporate income tax return filing deadline. As such, companies closing on December 31st, 2022 will therefore have to e-file the return by November 3rd, 2023 at the latest.
The completion of the form is usually underestimated by the taxpayers and even forgotten. However, our recent experience in tax audits shows that tax inspectors are more and more using the inconsistencies between the form and the statutory accounts which does not help managing smoothly the relationship with tax inspectors. In addition, this return allows us to make an initial diagnosis of your transfer pricing policy.
This disclosure requirement applies to French legal entities as well as to French permanent establishments of foreign entities:
The 2257-SD return is a light version of the transfer pricing documentation provided for in Article L.13 AA of the French tax procedure code.
The information contained in the declaration enhances the effectiveness of tax audits by allowing tax inspectors to carry out preliminary analyzes of the data reported.
The form 2257-SD therefore allows the tax administration to schedule its tax audits in a more efficient and targeted manner.
In practice, the declaration must be submitted electronically.
In the presence of a tax consolidation group, the electronic declaration must be made by the parent company on behalf of each of the member companies.
Failure to submit the return results in the application of a fine of €150. Omissions or inaccuracies result in the application of a fine of €15 per omission or inaccuracy, without the total fines being less than €60 nor more than €10,000.
Whilst penalties are not significant, it is important not to overlook the 2257-SD return, which must be completed thoroughly and in full compliance with the transfer pricing documentation and statutory account.
The preparation of the 2257-SD involves rigorous collection of relevant information and technical analysis. It is therefore recommended to take action as soon as possible to comply with its reporting obligation.
Our team is fully available to assist you in the preparation, the review and the online submission of your 2257-SD return.
To go further : Transfer pricing - identify your French transfer pricing obligations | Grant Thornton (avocats-gt.com)
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