KPMG report: OECD official provides update on work on Amount B

OECD plans to release a consultation document on Amount B.

OECD plans to release a consultation document on Amount B.

Mayra Lucas from the OECD spoke earlier today at the KPMG-sponsored TP Minds West Coast conference and discussed the ongoing work on Amount B.  Ms. Lucas indicated that the OECD plans to release a consultation document on Amount B this week in time for its Q&A webcast on Amount B scheduled for Thursday, 8 December 2022 at 5:00 PM (Paris time). The OECD posted on its website a link to register for the webinar.

Amount B aims to standardize the remuneration of related party distributors that perform “baseline marketing and distribution activities.”  If implemented, Amount B will be a critical component in setting transfer prices—and will have a very widespread impact.

In her remarks, Ms. Lucas said:

Many transfer pricing disputes deal with distribution arrangements between related parties. Some focus on understanding what is the actual transaction and whether the distributor performs baseline distribution or more complex activities, while other disputes concentrate on pricing considerations. Amount B can improve the current situation by simplifying the application of the arm’s length principle to in-scope transactions. This will not only benefit low capacity jurisdictions, by providing an approach to overcome the unavailability of reliable comparables, but also jurisdictions with more sophisticated transfer pricing systems, as well as taxpayers seeking to comply with the arm’s length principle while ensuring greater levels of tax certainty.

KPMG will publish a summary analysis of the Amount B rules after the public consultation document has been released.


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