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.