Amount B was introduced as a “fixed return” on “baseline marketing and distribution activities” in the October 2020 Blueprint of Pillar One, and was seen as a critical component of the Pillar One deal. Nevertheless, over the past two years, in respect of Pillar One developments, the focus of the OECD Inclusive Framework members has been primarily on Amount A.
However, on 8 December 2022, the OECD finally released the long-awaited consultation document and hosted a webinar on the proposed design of Amount B, putting Amount B back into the international tax spotlight. The OECD has now requested input from stakeholders on the technical design of Amount B, with comments to be received no later than 25 January 2023.
In more detail
On 8 December 2022, the OECD published a public consultation document on Amount B. It outlines the main design elements of Amount B, consisting of, inter alia, the transactions in scope of Amount B and the proposed pricing methodology to determine an appropriate remuneration for the in-scope activities.
Since the publication of the Pillar One Blueprint in October 2020, Amount B has been living in the shadow of Amount A, leading to a great deal of uncertainty about its future amongst the international tax community. The OECD has, up until now, appeared to prioritize the progress of Amount A, placing Amount B in the background. The main points to take away from the original Blueprint were the two components of Amount B, namely:
- The scope of “baseline marketing and distribution activities” will be eligible for Amount B.
- A proposed remuneration mechanism for the aforementioned in-scope activities.
With no official developments regarding Amount B since the release of the Blueprint, the launch of the consultation document on 8 December 2022 has been long overdue.
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