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Simplified transfer pricing declaration

The French Tax Authorities clarified the postponement of the filing deadline for the 2257-SD form


In a press release dated April 17, 2020, the Minister of Public Action and Accounts announced that the deadline for filing the corporate income tax package for companies with fiscal years ending 31st December 2020, 31st January 2020 and 29th February 2020 was postponed to 30th June 2020. In the absence of information regarding the deadline for filing the simplified transfer pricing declaration (2257-SD form), which pursuant to Article 223 quinquies B of the French Tax Code must usually be filed no later than 6 months following the standard deadline for filing the corporate income tax package, it was, so far, considered that the deadline for filing the 2257-SD form was not postponed accordingly, given the very exceptional nature of the extended delay, the form taken by the public announcement and the absence of a legal text on which to rely.

On June 2, 2020, in an update of the answers to the questions on the exceptional tax measures in favour of companies, the French Tax Authorities (“FTC”) finally provided clarifications, indicating that, in order to take into account the postponement of the filing deadline for the tax package for "companies facing difficulties because of the sanitary crisis" and whose financial year ended on December 31, 2019, the 2257-SD form will have to be filed by December 31, 2020 at the latest. This postponement is also allowed for companies which do not close their accounts at the end of the calendar year and which benefit from the postponement of the filing deadline for the corporate income tax package.

By referring to “companies facing difficulties because of the sanitary crisis”, we do not believe that the FTC  would actually request that the taxpayers demonstrate such difficulties (as it is the case for other favourable measures such as the extension of deadline for the payment of tax bills) since there is no cash consequences for the filing of the 2257 return.  Yet, we advise our clients who have filed their annual corporate tax return within the standard deadline to act likewise for the 2257 return, i.e. file it within the six-month period following the filing of the annual tax return.

In contrast, no clarification has been provided by FTC regarding the filing of the 2258-SD form relating to the Country by Country Reporting, which has to be filed within 12 months following the closing date of the group’s financial year. As financial year closing dates per se are unchanged, so the transmission deadline of form 2258-SD has not changed either.

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