KPMG report: Public consultation on Amount B under Pillar One

The Organisation for Economic Cooperation and Development (OECD) on 17 July 2023 released a public consultation document on Amount B under Pillar One (read TaxNewsFlash), which builds on and takes into account comments received in response to a prior consultation document released on December 8, 2022 (read TaxNewsFlash).

The work on Amount B aims to fulfil the commitment that the OECD/G20 Inclusive Framework on BEPS made in October 2021 to simplify and streamline the application of the arm’s length principle to baseline marketing and distribution activities, with a particular focus on the needs of low-capacity jurisdictions. ​

The consultation document outlines an approach to Amount B that is more developed than the prior consultation document. However, it still does not represent the consensus views of the Inclusive Framework, and there are a number of significant outstanding issues, including the role of qualitative factors in the scope of Amount B, the pricing framework, and the application of Amount B to the wholesale distribution of digital goods.​

Public comments are requested by September 1, 2023. The Inclusive Framework aims to complete its remaining work in time for the final report on Amount B to be incorporated into the OECD Transfer Pricing Guidelines in January 2024.

Read a July 2023 report prepared by KPMG LLP that provides initial observations of the public consultation document.