BorderCrossings … with EY transfer pricing and tax professionals - April 2025

OECD Pillar One update: what’s next?

Pillar One, Amount A is unlikely to come into force over the next few years. Amount B is not being implemented by many countries and risks being inconsistently implemented by other countries, leaving its future unclear. So why discuss Pillar One in this environment?

The underlying forces that led to Amount A and Amount B (including dissatisfaction with the arm’s length principle, unilateral reactions such as digital services taxes, and transfer pricing controversies around routine activities) remain. To assess where things might be headed, it is important to critically assess the rationale for Pillar One and its current shortcomings.

This month, we will take a deeper dive into some of the technical aspects of Amount A and Amount B, including the link between Amount A and the historical “formulary apportionment versus arm’s length” debate, and the foundations of and potential derivative effects around the Amount B work.

Panelist

Bill Morgan, Managing Director, Transfer Pricing, International Tax and Transaction Services, Ernst & Young LLP. Bill was previously with the US Treasury Department where, among other things, he represented the United States at Working Party 6 of the OECD during the Pillar One work.

Moderator

Mike McDonald, Managing Director, Transfer Pricing, International Tax and Transaction Services, Ernst & Young LLP

EY webcast managed and produced by Ernst & Young LLP’s Tax Technical Knowledge Services Group, Washington, DC: Lynn Fairfax.