Transfer pricing regulations are mechanisms implemented by States to ensure that companies belonging to the same group operating in different countries cannot decide to artificially shift their profits in a particular country by adjusting the prices charged for intra-group transactions of goods, services, or intangibles.
Through these rules, governments require companies belonging to the same group to charge each other prices that would be charged if each company were independent and negotiated prices according to market conditions, on an arm’s length basis. Although guidelines have been established by supranational organizations such as the OECD, transfer pricing regulations remain specific to each jurisdiction.
This comparative study between Greece and France identifies the similarities and differences in the rules applicable to international companies in these two countries.
Thresholds for Mandatory Documentation Requirements
One of the tools used by tax authorities to ensure price neutrality in transactions between related entities is the requirement for companies to select and apply an appropriate transfer pricing method for their intra-group transactions and to prepare contemporaneous documentation justifying the arm’s length nature of these transactions. However, this documentation requirement does not apply universally to all companies; it may be conditional on their size.
In France, the obligation to prepare and keep available for the tax authorities documentation justifying the transfer pricing policy applied, for transactions of any nature carried out with related legal entities established or incorporated outside France, has applied since 2024 to French legal entities whose annual turnover (excluding taxes), or gross assets as shown on the balance sheet, reaches €150 million.
This obligation also applies to:
- French legal entities that directly or indirectly hold more than 50% of the capital or voting rights of one or more entities exceeding this turnover or gross asset threshold,
- French legal entities more than 50% of whose capital or voting rights are directly or indirectly held by one or more entities exceeding this turnover or gross asset threshold,
- French legal entities that are members of a tax-consolidated group that includes at least one entity exceeding this threshold.
Before 2024, the threshold was set at €400 million. The reduction in the threshold triggering the documentation requirement has therefore resulted in many new French companies falling within the scope of the applicable transfer pricing rules.
Ιn Greece transfer pricing documentation requirements are bound to transaction values and the taxpayer’s total turnover:
- entities with a turnover of up to €5 million have an obligation to document their transfer prices if related-party transactions or transfers of operations exceed €100,000 per year,
- entities with a turnover of over €5 million have an obligation to document their transfer prices if related-party transactions or transfers of operations exceed €200,000 per year.
Related-party transactions in this case include also transactions between related Greek entities.
Once the thresholds are met, taxpayers are expected to prepare both Master File and Local File, and document all covered transactions regardless of value.
Proof of the Absence of an Indirect Transfer of Profits
Traditionally in France, it was the tax authorities, during their audits, who had to demonstrate that the prices charged between related entities differed from those charged between unrelated entities, and that they constituted indirect transfers of profits from one to the other.
However, since 2024, the documentation prepared by the company can be used against it. Indeed, if the prices charged between related companies do not correspond to those that should have been obtained by applying the method set out and described in the documentation, for whatever reason, it is now up to the company to prove that these prices do not constitute an indirectly transferred profit. The company may provide such proof; otherwise, it is deemed to have indirectly transferred part of its profit and will be taxed on that amount.
In Greece the burden of proof also lies with the company, which has to provide contemporaneous transfer pricing documentation within 30 days upon request.
Penalties
Both Greek and French tax law provide for penalties for failure to prepare or present transfer pricing documentation.
In France, the penalty is set at the higher of 0.5% of the amount of the transactions covered by the documents not made available to the authorities and 5% of the adjustments to the result relating to the transactions in question.
Furthermore, French law now sets the minimum penalty at €50,000 per audited financial year (i.e., €150,000 for the last three financial years that may be audited), which represents a serious threat to companies operating in France if the issue of documentation is not taken seriously.
In Greece the delayed submission of the Summary Information Table carries a penalty between €500 and €2,000, while failure to submit the Summary Information Table carries a penalty between €2,500 and €10,000.
The penalties for the delayed submission of the transfer pricing documentation range from €5,000 to €20,000, while failure to submit the documentation or a delay exceeding 90 days are sanctioned with €20,000.
However, in both jurisdictions the most important consequence of failing to submit a transfer pricing documentation is that this gives the tax authorities the freedom to determine by themselves what an arm’s length price for the controlled transactions would be, without taking into consideration the taxpayers perspective.
Conclusion
In both Greece and France, the legislator has sought to increase control over indirect profit transfers by companies belonging to an international group, in order to protect the tax base in their respective territories. These rules require economic actors to exercise heightened vigilance regarding financial flows with related companies located in different countries, particularly due to differences in rules concerning documentation thresholds, applicable penalties, and the burden of proof.
This series is prepared by the ETL GLOBAL Transfer Pricing Group. For a more detailed overview of transfer pricing regulations across different jurisdictions, please refer to the ETL GLOBAL Transfer Pricing Guide 2025/26.
