French Court Reinforces Burden of Proof for Intra-Group Trademark Royalties

10 December 2025

The Cour administrative d’appel de Paris reviewed a transfer pricing dispute concerning the deductibility of intra-group trademark royalty payments made by ArcelorMittal France.

Following a tax audit, the French tax authorities disallowed the royalties, concluding that the taxpayer had not demonstrated that the payments reflected an arm’s-length price or generated a measurable economic benefit.

On appeal, ArcelorMittal France argued that the royalties were justified by the value of the group trademarks and consistent with market practice. The tax authorities maintained that group membership alone was insufficient and that the burden of proof lay with the taxpayer to show both the existence of a benefit and the arm’s-length nature of the payments.

In its December 2025 judgment, the Court upheld the tax authorities’ position. It found that ArcelorMittal France had failed to establish that the trademarks enhanced its commercial performance or provided identifiable advantages. The Court therefore confirmed the disallowance of the royalty deductions.

The decision provides important guidance on the treatment of intra-group royalties in France and reinforces the strict evidentiary burden placed on taxpayers in transfer pricing disputes involving intangibles.

Find the Full English Translation Here: France vs ArcelorMittal France, December 2025, CAA de PARIS, Case No 25PA00451 - TPcases