Unveiled earlier this year, the guidelines are the country’s first formal rules on documentation.

A proposal to introduce more precise obligations will only apply to large multinationals with an annual turnover of more than €400 million ($591 million).

Speaking at International Tax Review’s Global Transfer Pricing Forum, Yohann Benard, deputy director general of the cabinet of Christine Lagarde,  the French minister of finance, said: “There are two targets for the documentation.

“Firstly, we want to improve legal certainty through the clear rules. And secondly, we want to improve efficiency and consistency of transfer pricing audits.

Failure to maintain contemporaneous documents will result in severe penalties.

Benard also spoke about improvements the government has seen in the advance pricing agreement and mutual agreement procedures. The time to complete both has decreased and more people are applying for such agreements.

“The process is working better and better,” said Benard.

The arbitration convention and developments in this area have spurned the government to make changes.

“It is a huge incentive to do two things; first to solve cases between the two authorities effectively and; second to shorten the length of time [to reach a resolution],” said Benard, who is responsible for taxation, budget, state reform and international relationships in the office of the minister.

Benard said the tax authorities are keeping a “close eye” on OECD projects as they are of "major importance for international companies".