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Amount B is a component of the OECD Pillar One initiative that aims to simplify transfer pricing rules for baseline marketing and distribution activities (for more information see our previous tax alert). So far, only a limited amount of countries have expressed their intent of how and whether they will implement Amount B.
In Notice 2025-04 (Notice), the US Treasury and IRS announced now their intent to issue proposed regulations and other guidance to implement the OECD's simplified and streamlined approach (SSA) for pricing certain controlled transactions involving baseline marketing and distribution activities. The Treasury and IRS seem to be committing to some application of Amount B regardless of what other countries decide to do.
The SSA will serve as a safe harbor for intercompany pricing, providing certainty for routine marketing and distribution activities while minimizing transfer pricing disputes.
Taxpayers subject to US tax with respect to in-scope transactions may elect to apply the SSA for tax years beginning on or after January 1, 2025. Treasury and the IRS will continue to consider whether application of the SSA should be mandatory.
The IRS requested comments to be submitted on the Notice by March 7, 2025.
More information can be found in our US alert.
It is recommended for Belgian companies with affiliated entities in the US performing baseline marking and distribution activities to evaluate the impact of Amount B and whether they would like to take advantage of the safe harbour.