Amount B: Facts and Circumstances Matter—Even for Routine Distributors

05 February 2021
Dr. Harlow Higinbotham, Dr. Niraja Srinivasan, Dr. Vladimir Starkov, and Nihan Mert-Beydilli

A team of NERA transfer pricing experts have published “Amount B: Facts and Circumstances Matter—Even for Routine Distributors” in Tax Management International Journal. Managing Director Dr. Harlow Higinbotham, Directors Dr. Niraja Srinivasan and Dr. Vladimir Starkov, and Associate Director Nihan Mert-Beydilli authored the paper with the esteemed Dr. Lorraine Eden, Professor Emerita of Management in the Mays Business School of Texas A&M University.

The authors comment on and provide recommendations for the Amount B chapter of the Pillar One Blueprint released by the OECD/Inclusive Framework, which is designed to standardize the return to certain baseline distribution and marketing activities that take place in a market jurisdiction. They argue that facts and circumstances do impact the profits to be earned on baseline marketing and distribution activities, even those that are routine. The authors go on to comment on the scope and implementation of various Pillar One proposals addressing Amount B, providing suggestions on the application of Amount B for better compliance with the arm’s-length principle.