KPMG report: Amount B and tax certainty
A central aim of Amount B is to reduce disputes around routine wholesale distribution issues and to promote tax certainty.
Reduce disputes around routine wholesale distribution issues and to promote tax certainty
More than 130 members of the OECD/G20 Inclusive Framework on BEPS in October 2021 committed to a plan of work that included Amount B, which aims to streamline and simplify the application of the arm’s length standard to baseline marketing and distribution activities. A central aim of Amount B is to reduce disputes around routine wholesale distribution issues and to promote tax certainty.
An initial consultation document was released on Amount B in December 2022 (read TaxNewsFlash), and a second consultation document followed on 17 July 2023 (read TaxNewsFlash).
The current consultation period closes on 1 September 2023, and the Inclusive Framework aims to conclude work on Amount B and incorporate it into the OECD Transfer Pricing Guidelines in January 2024.
At the heart of Amount B is a tension between certainty and consistency with the arm’s length principle. The extent to which the current proposal achieves the latter aim is beyond the scope of this article, and in any event would require a review of more data than has yet been published on the OECD’s benchmarking analysis. With respect to certainty, however, it is possible to make some initial observations.
Read an August 2023 report* [PDF 53 KB] prepared by KPMG LLP that discusses the latest consultation document on Amount B.
* This article appears in International Tax Review and is provided with permission.
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