Following an audit of GE Medical Systems Limited Partnership (SCS), which is engaged in the manufacturing and marketing of medical equipment and software, the French tax authorities issued an assessment related to the “value added amount” produced by the company, which serves as the basis for calculating the French minimum contribution of business tax provided for in Article 1647 E of the General Tax Code. The tax authorities was of the view that (1) prices charged for goods and services provided to foreign-affiliated companies had been lower than arm’s length prices and that (2) part of deducted factoring costs were not deductible in the basis for calculating the minimum business tax. On that basis a discretionary assessment of additional minimum business tax was issued. GE Medical Systems appealed the assessment to the Administrative Court of  Appeal. The Court of Appeal came to the conclusion that the basis for assessment of arm’s length prices of the goods and services sold had been sufficient, but in regards to the denial of deductions of the full factoring costs the court ruled in favor of GE Medical Systems. GE appealed the decision in relation to basis for the assessment of arm’s length prices for goods and services, and the tax authorities appealed the decision in relation to allowance of the full deduction of factoring costs in the basis for calculating the minimum business tax. The Supreme Court – Conseil d’État – denied the appeal of GE Medical Systems in relation to the basis for determining arm’s length prices of the goods and services sold to foreign-affiliated companies. On the issue of full deduction of factoring costs, the Supreme Court allowed the appeal of the tax authorities and annulled the decision of the Administrative Court of Appeal. Click here for Translation Conseil_d_État_8ème_-_3ème_chambres_réunies_28_11_2018_410779_Inédit_au_recueil_Lebon (1) ...