Commissionaire structures are not uncommon within multinational groups.
The concept of a “commissionaire” is based on civil law systems such as those in France, Germany, the Netherlands and Switzerland. It refers to a person who sells goods in his own name, but for the account of a principal.
Under a commissionaire arrangement:
- the commissionaire sells to customers, and acts in the commissionaire’s own name
- the principal is contractually bound to deliver the goods to the customers
- title in the goods passes directly from the principal to the customers
- the commissionaire is contractually bound to remit the price received to the principal
- no contractual relationship is created between customers and the principal, and Customers have a right of recourse against the commissionaire only
There is no direct equivalent under English law. The closest is an agent for an undisclosed principal. However, this has a different legal effect in law, because the customer can sue both the agent and the principal.
A discussion of areas of possible tax challenge can be found in the Transfer Pricing section of HMRC’s International Manual.