On 19 February 2024, the OECD/G20 Inclusive Framework on BEPS released its final report on Amount B of Pillar One, “Special Considerations for Baseline Distribution Activities.” The intention of Amount B is to facilitate the enhancement of tax certainty and the reduction of risks of tax disputes, double taxation, and the compliance burden and administrative resources of fiscal authorities and corporate taxpayers. The OECD is currently in the process of designing a framework to gather information on the practical application of the simplified and streamlined approach.

In this International Transfer Pricing Journal article, Principal Ronald Bernstein and Senior Managing Director Yves Hervé discuss implications for the application of the Amount B pricing framework under consideration of various aspects in cases in which the baseline scope as defined by the OECD is either met or exceeded (e.g., when contributions to the development, enhancement, maintenance, protection, and exploitation (DEMPE) of intangibles and/or synergies provide additional value contributions beyond the defined baseline scope).

The authors advise that when applying the three-step process, there are certain intricacies to be aware of and consider in its application. They provide suggestions on how to approach and deal with these intricacies in practice. The authors hope their insights contribute to further useful implementation guidance by the OECD in the future.