International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

France: Nestlé case


Renaud Jouffroy

Fabien Cotte

It is still uncertain whether a cross border transfer of a cash pooling activity within a group may constitute an indirect transfer of profit. In 2011, the Paris Administrative Court ruled that the transfer of a cash pooling activity without compensation from a French company to another member of the group located in a foreign jurisdiction (Switzerland) qualifies as an indirect transfer of profits. Therefore, the tax authorities have been entitled to reassess Nestlé up to the value of the activity transferred, retaining a profit margin of 0.5%, which according to the tax authorities corresponded to the usual profit margin applied by various multinational companies for such an activity.

The Court of Appeal of Paris reversed the decision of the Paris Administrative Court, but only to the extent that the tax authorities cannot justify the 0.5% rate, in particular in the light of the activity performed, guarantees granted by the debtors and their risk profiles.

The Court of Appeal did not rule whether such a transfer of a cash pooling activity within a group may constitute, in itself, an indirect transfer of profit on the transfer of a valuable intangible. On this basis, and pending the Supreme Court decision, the transfer of any functions or activities (including non-operational intra-group ones) outside France should still be carefully monitored.

Renaud Jouffroy (

Tel: +33 (0) 1 56 57 42 29
Fabien Cotte (

Tel: +33 (0) 1 56 57 47 72

Landwell & Associés, Paris


more across site & bottom lb ros

More from across our site

David Pickstone and Anastasia Nourescu of Stewarts review the facts and implications of Ørsted’s appeal at the Upper Tribunal.
The Internal Revenue Service will lose the funding as part of the US debt limit deal, while Amazon UK reaps the benefits of the 130% ‘super-deduction’.
The European Commission wanted to make an example of US companies like Apple, but its crusade against ‘sweetheart’ tax rulings may be derailed at the CJEU.
The OECD has announced that a TP training programme is about to conclude in West Africa, a region that has been plagued by mispricing activities for a number of years.
Richard Murphy and Andrew Baker make the case for tax transparency as a public good and how key principles should lead to a better tax system.
‘Go on leave, effective immediately’, PwC has told nine partners in the latest development in the firm’s ongoing tax scandal.
The forum heard that VAT professionals are struggling under new pressures to validate transactions and catch fraud, responsibilities that they say should lie with governments.
The working paper suggested a new framework for boosting effective carbon rates and reducing the inconsistency of climate policy.
UAE firm Virtuzone launches ‘TaxGPT’, claiming it is the first AI-powered tax tool, while the Australian police faces claims of a conflict of interest over its PwC audit contract.
The US technology company is defending its past Irish tax arrangements at the CJEU in a final showdown that could have major political repercussions.