In this case, the French tax authorities pretended that the lack of payment of trademark's royalties to a parent company by its foreign subsidiaries was an income waiving which should be analyzed as an indirect transfer of profits abroad.

The French lower administrative Court of Montreuil pointed out that the comparables used by the French tax authorities, in order to demonstrate that the absence of payment of trademark's royalties, were not relevant both with the contractual framework of the trademark provision and the markets concerned.

The lower administrative Court has also grounded its decision on the circumstance that the trademark notoriety varied from a market to another one and that foreign subsidiaries were locally in charge of development actions of this trademark.

With this decision, it is reminded that the French tax authorities can ground reassessments related to trademark’s royalties in the only extent that they can demonstrate, based on relevant comparables, their economic approach.