The implementation of Amount B became a reality based on the Final Report released by the Organisation for Economic Cooperation and Development (OECD) on February 19, 2024. The report provides guidelines intended to simplify and streamline the application of the arm's length principle with regard to baseline marketing and distribution activities. Now as an Annex to Chapter IV of the OECD Transfer Pricing Guidelines, the Final Report offers detailed guidance for effective implementation. Jurisdictions can choose to apply the Amount B approach for in-scope transactions of taxpayers in their jurisdictions for fiscal years starting on or after January 1, 2025. Countries that choose to apply the simplified and streamlined approach may opt to apply Amount B by either (1) permitting taxpayers resident within their jurisdiction to elect to apply the Amount B approach; or (2) require the Amount B approach to be used in a prescriptive manner in the jurisdiction.
Watch this space for further updates on Amount B or contact one of our Pillar 1 specialists.
