Kettner was a French distributor of hunting products. Kettner was charged service fees by it’s German parent company for a range of services including packaging, warehouse and inventory management, IT, management fees etc.
The tax administration was of the opinion that the fees had not been determined in accordance with the arm’s length principle and were able to show discrepancies in the invoicing and a lack of supporting information for expenses charged back to the French distributor.
The court considered that the tax administration did not demonstrate a “transfer of profits abroad” as no comparison with independent companies had been made in order to validate that the fees paid had not been at arm’s-length.
Click here for other translation
France vs kettner_no_10pa04193_administrative_court_of_appeals_of_paris_29_03_2012-pdf