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20 December 2024 OECD releases fact sheet and automated tool for Pillar One Amount B
On 20 December 2024, the Organisation for Economic Co-operation and Development (OECD) released a “fact sheet” that explains, step-by-step, the application of Amount B and an “automated tool” for pricing the return on sales for baseline distribution activities under Amount B. Both are available on a new “Pillar One – Amount B” website (Pillar One – Amount B | OECD). Taken together, the release amounts to an electronic “gift” and associated set-up instructions, just in time for the holidays. The fact sheet provides an illustrated five-page summary of the February 2024 publication on a step-by-step basis. Step 1 provides guidance on applying the qualitative and quantitative criteria to determine potential eligibility for Amount B, corresponding to Section 3 of the February publication. Step 2 provides guidance on applying the Amount B pricing framework, corresponding to Section 5 of the February 2024 publication. Each step has several sub-steps illustrating the underlying key details of applying the Amount B rules in evaluating a specific individual potential in-scope distributor:
With the fact sheet as background, the Amount B automated tool is an Excel spreadsheet that provides a rudimentary input-output calculator for a specific individual potential in-scope distributor. That is, the tool does not allow for multiple distributors to be evaluated at once, although no doubt a skilled user could modify the tool to do so. It provides for user-provided inputs, such as the name of the distributor jurisdiction, three years of financial information (consisting of net revenues, cost of goods sold, operating expenses, fixed assets, working capital and liabilities), and industry grouping or groupings.
The Amount B automated tool has value in its own right (for determining the Amount B results for a particular distributor), and also as a check on the calculations that should be used for more complicated and comprehensive Amount B tools (e.g., taxpayer-developed calculators that determine Amount B for all distributors in the entire corporate group).
Document ID: 2024-2373 | ||||||