2024 French Finance Bill: a Focus on HTVI Related Measures

The 2024 French Finance Bill, officially known as law n°2023-1322, was passed on December 29, 2023. It brings in new regulations aimed at strengthening the requirements for transfer pricing documentation and empowering the French Tax Authorities (FTA) to oversee transactions involving Hard-To-Value Intangibles (HTVI).

This bill introduces three key measures concerning HTVI:

  • Allowing the FTA to use ex-post financial data to assess the value of HTVI.
  • Extending the statute of limitation period for HTVI-related transactions from 3 to 6 years (the standard limitation period in France).
  • Granting the FTA the authority to conduct multiple audits of the same HTVI transactions within this 6-year period, through a new exception to the general rule outlined in Article L.51 of the French Tax Procedure Code (FTPC), which typically restricts the FTA from auditing the same operations multiple times.

Below, we delve into the implications of these new provisions in the law.

HTVI: definition in French Law

The French law’s definition of HTVI is outlined in article 1649 AH, II, E, 2° of the French General Tax Code (GTC), introduced during France’s implementation of the DAC 6 Directive. This definition closely mirrors that of the OECD, categorizing HTVI as an intangible asset meeting the following criteria:

  • Lack of reliable comparable transactions between independent parties
  • High uncertainty surrounding projected cash flows/revenues or valuation assumptions at the time of the transaction, making it challenging to anticipate the success of exploiting the intangible asset.

However, this definition of HTVI lacks precision, especially regarding the second criterion. Consequently, we anticipate potential legal challenges in court. Clarity on the definition is expected to emerge from future case law.

HTVI: use of ex-post financial data during a tax audit

The 2024 French Finance Bill introduces a significant change regarding the use of ex-post financial data by the French Tax Authorities (FTA) during tax audits of transactions involving Hard-To-Value Intangibles (HTVI), outlined in Article 238 bis-O I ter of the GTC.

Under this new provision, the FTA is authorized to adjust the value of an HTVI-related transaction based on a valuation using actual financial data observed over fiscal years following the date of the audited HTVI transaction. For example, if an HTVI transaction occurred in 2024 and is audited in 2027, the FTA will now be able to utilize post-2024 financial data for valuation purposes, rather than relying solely on projected financials available at the time of the transaction. If the valuation outcome differs from the transfer price of the transaction, the FTA is empowered to adjust the transfer price accordingly. It’s worth noting that HTVI transactions may involve either the sale or licensing of intangible assets. The applicability of this new rule to both types of transactions will need to be assessed on a case-by-case basis. However, it’s important to acknowledge that the law’s language on this matter lacks precision. In such cases, referencing definitions provided in OECD guidelines may prove particularly useful for interpretation.

Exceptions where the FTA may not rely on actual data post-transaction

Article 238 bis-O I ter of the GTC outlines four exceptions where the FTA is prohibited from adjusting the value of an HTVI related to transaction based on actual data:


  1. The taxpayer provides detailed information on the forecasts used, at the time of the transfer, to determine the transfer price, including how risks and foreseeable events were accounted for, as well as their probability of occurrence, and demonstrates that any significant difference between these forecasts and actual results is attributable to unforeseeable events at the time of the determination of the transfer price, or to the occurrence of foreseeable events, provided that their probability of occurrence has not been significantly underestimated or overestimated at the time of the transaction.
  2. The transfer in question is covered by a multilateral advance pricing agreement, in force for the period concerned, between the jurisdictions of the transferee and the transferor.
  3. The difference between the valuation based on the transaction’s forecasts and actual data observed afterward is less than 20%.
  4. A commercialization period of five years has passed since the asset or right first generated income from an entity unrelated to the transferee and, during this period, the difference between the transaction’s forecasts and actual data observed afterward is less than 20%.

In this context, it becomes crucial for taxpayers to bolster the documentation of their intangible assets transactions, either to demonstrate that it is not an HTVI, and/or to demonstrate that the business plan used was appropriately based on all foreseeable data, risks and events at the time of the transactions.

In addition, this documentation should be updated annually to explain any discrepancies between business plans and actual data observed post-transaction.

Furthermore, this measure provides a rationale for requesting multilateral APA in cases where significant amount are at stake, despite the potentially lengthy procedure involved.

Extension of the limitation period to 6 years

The standard statute of limitation period for the FTA to audit a taxpayer’s position is three years.

However, the 2024 French Finance Bill introduced Article L.171B of the FTPC, extending this limitation period to 6 years specifically for transactions related to HTVI.

The rationale for this change is clear: to enable the FTA to utilize actual post-transaction data in auditing HTVI transactions, thereby necessitating an extension of the limitation period.

A new exception to the guarantee of non-renewal of a tax audit

Article L.51 of the FTPC states that the FTA are prohibited from auditing the same accounting entries or taxes multiple times. However, this article includes a list of exceptions allowing the FTA to bypass this rule and conduct multiple audits of the same operation.

In line with this, the 2024 French Finance Bill introduces changes to Article L.51 of the FTPC, specifically introducing a new exception related to transactions involving Hard-To-Value Intangibles (HTVI).

Henceforth, effective for any transaction entered into fiscal years starting from January 1, 2024., the FTA will have the authority to conduct multiple audits of the same HTVI transaction within the newly extended 6-year limitation period.


Aymeric Nouaille-Degorce

Aymeric Nouaille-Degorce, Partner, is a member of the Transfer Pricing’s team. He has more than 22 years of experience in this area, including more than six years spent within the […]

Thomas Pautrat

Partner in TP at Deloitte Société d’Avocats. Thomas joined the firm in May 2012. Previously, he worked for the French Ministry of Research & Innovation, on Public Policy Assessment, in […]

Eléonore Christiaens

Eleonore is an attorney at law, with 5 years of experience in International Tax and Transfer Pricing issues. She is notably involved in structuring and documenting transfer pricing policies, as […]