• Planning Tax-Efficient Supply Chain Models Using “Commissionaire” Structures: Implications of the Reversal of the Court in Zimmer

    March 18 2011, 08:30 - 08:30
    Location: AmCham France - 156, bd. Haussmann

    Planning Tax-Efficient Supply Chain Models Using “Commissionaire” Structures:  Implications of the Reversal of the Court in Zimmer

    The American Chamber of Commerce in Paris and Ernst & Young, Société d’Avocats are pleased to invite you to a breakfast roundtable to discuss recent trends in the use of commissionaire arrangements when multinationals seek to organize their supply chain flows. 
    Distribution structures may be organized to function in a more or less centralized manner.  In general, the scope of their services varies greatly.  There are distribution centres that are “fully-functioning” structures, operating independently and assuming all the functions and risks that may be associated with a product distribution activity.  Others may play a much narrower role, limiting their activities to defined, simple functions intended merely as an auxiliary support to the product sales.
    To meet the needs of competition in the context of a global economy, companies need to maximize the synergies and economies of scale by rationalizing their chains of distribution.  The need to increase efficiency and to cut costs generally leads companies to place functions adding significant value into a centralized unit, and to relegate a simpler role to local entities in charge of distribution, so the latter assume a limited number of functions and risks.
    Among the distribution structures with limited functions and risks are “commissionaires” –persons or entities that act in their own names, but on behalf of a principal. Since the decision of the Conseil d’Etat “Zimmer” of 31 March 2010, the use of commissionaire arrangements has once again become an interesting alternative in the choice of structures for distribution activities.  Prior to this, however, the commissionaire arrangement had fallen into disuse, as the lower courts held that it created a permanent establishment of the principal in France.  But, the Conseil d’Etat reversed this opinion and held that the commissionaire arrangement by itself did not constitute a permanent establishment of the British principal, despite the commissionaire’s economic dependence on the principal.
    During this roundtable, we will review the ramifications of the Conseil d’Etat decision in Zimmer, to what extent non-French principals can rely on the decision, as well as alternative structures for organizing supply-chain flows together with their relative advantages and disadvantages.
    The discussions will be lead by Philippe Paul-Boncour, member of the Barreau of the Hauts-de Seine and specialist in structuring international supply chains, together with other experts.