Finální Report OECD o Částce B Pilíře 1 (Pillar One Amount B)

OECD Final Report on Pillar One Amount B

On 19 February 2024, the OECD published the Final Report on Pillar One Amount B

• The Report aims to simplify and streamline the setting of transfer pricing for baseline distribution and marketing activities.
• Amount B will be generally applicable to many multinational businesses. There is no turnover threshold, only qualitative criteria that a distribution transaction or company must meet. Excluded are, inter alia, the distribution of intangible assets or commodities.
• The Report sets out a three-step procedure to determine a return on sales for in-scope distibutors.  In the first step, a "pricing matrix" is provided where, according to the instructions, the distributor can find its arm’s length sales margin, which ranges from 1.5% to 5.5%  (taking into account the industry category, net operating assets and operating costs intensities). This margin should then (after any adjustments in the next two steps) be considered at arm’s length without the need to be evidenced by a separate benchmark.
• The Report will be incorporated into the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.
• The Report indicates that the OECD will publish a list of the jurisdictions that choose to apply Amount B on or after 1 January 2025. Jurisdictions may introduce Amount B as mandatory or as an elective option for taxpayers.
• But how will this approach be viewed by counterparties whose jurisdictions do not introduce Amount B? States that choose not to adopt Amount B will continue to use their existing transfer pricing methodologies and will not be bound to follow the new guidelines, even in the context of dispute resolution. As an exception to this rule, according to the Amount B report, members of the OECD/G20 Inclusive Framework group commit to respect the outcome determined under Amount B where the simplified approach is applied by a so-called low-capacity jurisdiction (the list will be published by 31 March 2024).
• Thus, although the Report aims to reduce administrative burdens and create a more predictable and equitable international tax environment, there will be situations where it will only bring additional questions and complications in the area of international dispute resolution.

You can read more detailed information in EY's article here: OECD releases final guidance on Pillar One Amount B on baseline distribution (ey.com). If you need any assistance, please contact the author of the article or the EY team with whom you regularly work.

Author:
Klára Kišková