OECD: Model competent authority agreement on application of Amount B under Pillar One
Intended to assist countries in resolving potential double taxation in connection with application of Amount B when there is a bilateral tax treaty in effect
The Organisation for Economic Cooperation and Development (OECD) issued a Model Competent Authority Agreement (MCAA) on the Application of the Simplified and Streamlined Approach of Amount B under Pillar One.
As explained by the OECD release (September 26, 2024), the OECD’s Inclusive Framework released a report on Amount B of Pillar One in February 2024 report providing a simplified and streamlined pricing framework for baseline marketing and distribution activities that is expected to reduce transfer pricing disputes, compliance costs, and enhance tax certainty for both tax administrations and taxpayers. The OECD then released additional guidance on Amount B in June 2024—including the definition of covered jurisdiction for the Inclusive Framework political commitment on Amount B—allowing jurisdictions to begin with implementation. The MCAA on application of Amount B is intended to assist countries in resolving potential double taxation in connection with the application of Amount B when there is a bilateral tax treaty in effect.