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Transfer pricing oecd9/12/2023 ![]() The framework does not provide an exhaustive list of qualifying activities but identifies a set of core functions that distributors should perform in relation to in-scope transactions: Businesses will then need to determine whether “baseline” activities are undertaken using the Amount B scoping criteria. A wholesale and retail distributor is deemed to solely carry out wholesale distribution if annual net retail sales (to end consumers) do not exceed 20% of total annual net sales.Ĭonsideration is being given as to whether the scope should be expanded to include the wholesale distribution of digital goods.Īn accurate delineation of the in-scope transaction will need to be undertaken in accordance with chapter I of the OECD transfer pricing guidelines. ![]() Wholesale distribution includes distribution to any customers except end consumers. Sales agency and commissionaire transactions where the entity contributes to the wholesale distribution of goods to third parties for another group entity.Buy-sell marketing and distribution transactions where the distributor purchases goods from another group entity for wholesale distribution to third parties and.ScopeĪmount B will apply to the following transactions: It also seeks stakeholder input in a number of areas. The framework sets out the scoping criteria, pricing methodology, documentation, and tax certainty considerations relating to Amount B. ![]() The OECD inclusive framework has developed a framework for Amount B, which aims to simplify and streamline the application of the arm’s length principle to baseline marketing and distribution activities. Since 2017, the members of the OECD inclusive framework have developed a “two-pillar” approach, and Amount B forms part of the Pillar One package on profit allocation. ![]() This update follows a consultation on the main design elements of Amount B in December 2022. On 17 July 2023, the OECD/G20 Inclusive Framework on BEPS ("OECD inclusive framework") published a public consultation document containing updated design elements of Amount B of Pillar One, and outlining a new process for pricing baseline marketing and distribution activities in accordance with the arm’s length principle. ![]()
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