Accounting & Bookkeeping for French Companies in India
France is a significant and growing investor in India, with cumulative FDI inflows exceeding USD 10 billion since 2000. Major French corporations including Schneider Electric, Renault, Peugeot (Stellantis), L'Oreal, Capgemini, Atos, BNP Paribas, and Dassault Systemes have established substantial operations across India in manufacturing, IT services, luxury goods, defence, and financial services. As of 2025, more than 1,000 French companies operate in India, and bilateral trade continues to grow under the EU-India strategic partnership.
Every French company operating in India through a Wholly Owned Subsidiary (WOS), Branch Office, Liaison Office, or Joint Venture must maintain proper books of account in compliance with India's Companies Act, 2013. The law requires that books be kept at the company's registered office, that a statutory audit be conducted annually by a practicing Chartered Accountant, and that financial statements be filed with the Registrar of Companies (RoC).
French companies face a distinctive challenge in Indian accounting because France uses the Plan Comptable General (PCG) — a highly codified, rule-based national accounting framework that has been reformed under ANC 2022-06 (mandatory from January 2025). Meanwhile, Indian subsidiaries must follow Ind AS, which is converged with IFRS but has India-specific modifications. Many larger French groups report under IFRS-EU at the consolidated level, creating a three-layer reporting complexity: PCG for French statutory, IFRS-EU for group consolidation, and Ind AS for Indian statutory compliance.
BeaconFiling provides specialized accounting and bookkeeping services for French companies in India, managing this multi-standard complexity while ensuring full compliance with Indian regulations.
How France's DTAA Affects Accounting & Bookkeeping
The India-France Double Taxation Avoidance Agreement (DTAA), originally signed on September 29, 1992, and brought into force in 1994, directly affects the taxation of cross-border service charges between French parent companies and their Indian subsidiaries. In a significant development, India and France signed an Amending Protocol in 2025 during the French President's state visit to India, updating several key provisions of the treaty.
Under the India-France DTAA, withholding tax on fees for technical services — including accounting and bookkeeping service charges between group companies — is capped at 10%, well below India's domestic rate of 20%.
Key DTAA provisions relevant to accounting:
- Fees for Technical Services (Article 13): 10% withholding — the 2025 protocol has aligned the definition of FTS with the India-US DTAA, potentially narrowing what qualifies as FTS and requiring a "make available" test
- Dividends (Article 11): Under the 2025 protocol, dividends are taxed at 5% if the French company holds 10% or more of the Indian company's capital, or 15% for minority holdings — a change from the earlier uniform 10% rate
- Interest (Article 12): 10% withholding on interest payments from intercompany loans
- Royalties (Article 13): 10% withholding on royalty payments, including for ERP and accounting software licenses
- Permanent Establishment (PE): If French accounting or finance personnel regularly work from India, this may create a PE for the French entity, exposing it to Indian corporate tax
The 2025 protocol amendments are particularly important for French companies to review with their tax advisors. The modified FTS definition (requiring a "make available" test) could affect how intercompany accounting service charges are classified and taxed. For a full analysis, see our guide on the India-France DTAA.
Document Requirements from France
France is a member of the Hague Apostille Convention, and French documents can be authenticated via Apostille issued by the competent French authority (typically the Procureur de la Republique or the Cour d'Appel). This streamlines the document authentication process compared to embassy attestation. For a comparison, see Apostille vs. Embassy Attestation.
Documents required for setting up accounting services for a French subsidiary in India:
From the French Parent Company
- Extrait Kbis (commercial registry extract from the Greffe du Tribunal de Commerce) — apostilled
- Board Resolution (Proces-verbal du Conseil d'Administration) authorizing the engagement of Indian accounting services — notarized and apostilled
- Latest audited financial statements of the French parent (for transfer pricing benchmarking)
- Intercompany service agreement (Convention de prestation de services) detailing scope, pricing, and arm's length basis of accounting services
- Power of Attorney (Procuration) authorizing an Indian representative — notarized and apostilled
- Tax Residency Certificate from the Direction Generale des Finances Publiques (for DTAA claims)
From the Indian Subsidiary
- Certificate of Incorporation from the RoC
- PAN and TAN cards of the company
- GST registration certificate
- Board Resolution appointing the statutory auditor
- Bank statements and opening balance sheet
- Previous year's financial statements and tax returns (if applicable)
Step-by-Step Accounting & Bookkeeping Process
Here is the structured process for accounting and bookkeeping of a French company's Indian subsidiary:
Step 1: Chart of Accounts Configuration
Design a chart of accounts that maps to Ind AS reporting categories for Indian statutory purposes, while also aligning with the French parent's PCG structure or IFRS-EU consolidation requirements. French companies using SAP, Sage, or Cegid in France typically need a compatible setup in India using Tally ERP, SAP Business One, or Zoho Books. The reformed PCG (effective January 2025 under ANC 2022-06) has reduced the number of accounts by approximately 20%, which may necessitate remapping if the Indian chart of accounts was designed against the older PCG.
Step 2: Daily Transaction Recording
Record all financial transactions including sales, purchases, expenses, payroll, intercompany charges, and bank reconciliations. Under Indian law, every transaction must be supported by a valid tax invoice or voucher. For GST compliance, proper invoice documentation with correct HSN/SAC codes is mandatory for claiming input tax credits.
Step 3: Monthly GST Compliance
File monthly GST returns: GSTR-1 (outward supplies, due by the 11th) and GSTR-3B (summary return with tax payment, due by the 20th). French companies providing IT services, engineering services, or management consulting from their Indian subsidiary to overseas clients may qualify for zero-rated export of services, provided the payment is received in convertible foreign exchange and the conditions of Section 2(6) of the IGST Act are met.
Step 4: TDS Compliance
Withhold Tax at Source on all applicable payments. For payments to the French parent — management fees, accounting charges, royalties, or interest — apply the DTAA rate of 10% (subject to the 2025 protocol's modified FTS definition). Obtain a Tax Residency Certificate (TRC) from the French Direction Generale des Finances Publiques and file Form 10F. File quarterly TDS returns (Forms 24Q, 26Q, 27Q).
Step 5: Transfer Pricing Documentation
Prepare comprehensive transfer pricing documentation for all intercompany transactions. French companies commonly charge management fees (frais de gestion), accounting service fees, technology royalties, and brand royalties to their Indian subsidiaries. Each category must be independently benchmarked at arm's length. File Form 3CEB (transfer pricing audit report) by October 31.
Step 6: Statutory Audit and Financial Statements
Prepare Ind AS-compliant annual financial statements and have them audited by a practicing Chartered Accountant before the AGM (due by September 30). Additionally, prepare a separate reporting package for the French parent in PCG or IFRS-EU format, with all GAAP adjustments documented and reconciled.
Step 7: Annual Filings
File Form AOC-4 (within 30 days of AGM), Form MGT-7/MGT-7A (within 60 days of AGM), income tax return (by November 30 for TP cases), and the FEMA FLA return (by July 15). Coordinate with the French parent's fiscal calendar (typically January-December) to ensure timely consolidation data despite the fiscal year mismatch with India's April-March cycle.
Timeline and Costs for French Companies
Typical timeline and costs for accounting services for a French subsidiary in India:
| Activity | Timeline | Approximate Cost (Annual) |
|---|---|---|
| Chart of accounts setup and PCG/IFRS mapping | 1-3 weeks | INR 30,000-75,000 (one-time) |
| Monthly bookkeeping and reconciliation | Ongoing | INR 15,000-45,000 per month |
| Monthly GST return filing | Monthly | INR 5,000-15,000 per month |
| Quarterly TDS return filing | Quarterly | INR 3,000-8,000 per quarter |
| Transfer pricing documentation and Form 3CEB | Annually by Oct 31 | INR 75,000-2,50,000 |
| Statutory audit | July-September | INR 50,000-1,75,000 |
| ROC annual filings (AOC-4, MGT-7) | Within 30/60 days of AGM | INR 10,000-25,000 |
| Income tax return | By November 30 | INR 15,000-40,000 |
| FEMA/FLA annual return | By July 15 | INR 10,000-20,000 |
| PCG or IFRS-EU consolidation package | Monthly or quarterly | INR 10,000-35,000 per month |
Total annual costs for comprehensive accounting for a French subsidiary typically range from INR 4,00,000 to INR 12,00,000, depending on transaction volume, the number of intercompany charge categories, and whether dual or triple GAAP reporting is required. For cost benchmarking, see our blog on Accounting Costs for Foreign Subsidiaries in India.
Common Challenges for French Companies
Based on our experience serving French clients, here are the most common accounting challenges:
1. Multi-Standard Reporting Complexity
French companies often face a three-layer reporting burden: PCG for French statutory purposes, IFRS-EU for group consolidation, and Ind AS for Indian statutory compliance. While Ind AS and IFRS-EU share a common IFRS foundation, the India-specific carve-outs in Ind AS (particularly in areas like revenue recognition, lease accounting, and financial instruments) create reconciliation differences. Meanwhile, the reformed PCG (effective January 2025) adds another layer of mapping complexity. A well-designed chart of accounts that can serve all three frameworks is essential.
2. The 2025 DTAA Protocol Changes
The amended India-France DTAA protocol introduces a "make available" test for fees for technical services, which could change how intercompany accounting service charges are classified. Under the "make available" standard, a payment is treated as FTS only if the service recipient is enabled to apply the technical knowledge, experience, or skill independently in the future. Routine accounting and bookkeeping services may not meet this threshold, potentially removing them from the FTS category entirely — which could have favorable tax implications but requires careful legal analysis.
3. Fiscal Year Mismatch
France follows a January-December fiscal year, while India mandates April-March. French companies must manage two reporting calendars simultaneously, ensuring that the Indian subsidiary provides timely data for the French parent's annual close (December 31) while meeting its own Indian statutory deadlines (March 31 year-end, September 30 AGM deadline). Monthly or quarterly consolidation packages aligned to the French calendar are essential.
4. Transfer Pricing on Group Service Charges
French groups frequently centralize accounting, HR, IT, and other shared services at the parent level and charge fees to subsidiaries worldwide. Indian transfer pricing authorities closely scrutinize these charges, particularly where the Indian subsidiary shows low profitability. Demonstrating that the services were actually consumed, that they provided tangible benefit to the Indian entity, and that the pricing is at arm's length requires meticulous documentation.
5. Expatriate Tax and Social Security
French companies that deploy expatriate finance or accounting staff to India must navigate the India-France Social Security Agreement (signed in 2008) to avoid double social security contributions. Additionally, French expatriates working in India must comply with Indian income tax obligations, and their compensation must be properly recorded in the Indian subsidiary's payroll and books.
Why Choose BeaconFiling
BeaconFiling has deep expertise in providing accounting and bookkeeping services to French companies operating in India. We understand the complexities of the PCG, IFRS-EU, and Ind AS frameworks, and we navigate the updated India-France DTAA with precision. Our services include:
- Ind AS-compliant accounting with PCG and IFRS-EU consolidation reporting
- Monthly GST compliance, e-invoicing, and input tax credit optimization
- TDS management with DTAA-optimized withholding and Form 10F preparation
- Transfer pricing documentation, benchmarking, and Form 3CEB filing
- Statutory audit coordination, ROC filings, and income tax returns
- FEMA compliance, FLA returns, and RBI reporting
- Ongoing annual compliance management
Whether your French company is a CAC 40 multinational or a fast-growing mid-cap with ambitious India plans, BeaconFiling ensures your Indian subsidiary's accounting is rigorous, compliant, and seamlessly integrated with your French reporting structure. Learn more on our France country page.