Martin Bonner
Partner and Tax Advisor, AREA Bollenberger
Jelena Mihic
Managing Director at Kreston MDM Serbia
OECD Amount B: Transfer pricing safe harbour for multinationals
May 29, 2025
Kreston Global experts explain how the new OECD Amount B transfer pricing framework will affect multinational distributors and what it means for simplified compliance.
The Organisation for Economic Co-operation and Development (OECD) has revolutionised transfer pricing compliance with its Consolidated Report on Amount B, published 24 February 2025. This new framework introduces the first formulaic safe harbour in OECD history, offering multinational corporations and tax authorities a simplified approach to pricing routine distribution activities.
Martin Bonner, Managing Partner at AREA Bollenberger and Chair of the Kreston Global Transfer Pricing Group, and Jelena Mihić Munjić, Managing Director at Kreston MDM Serbia, both members of the Kreston Global network, recently shared their thoughts with Bloomberg Tax on the impact of the new framework on transfer pricing for multinationals.
What is OECD Amount B transfer pricing?
Amount B represents a significant departure from traditional transfer pricing methods. Unlike the complex comparable analysis typically required for cross-border transactions, this new framework provides predetermined profit margins for routine distributors of physical goods.
The system emerged from the BEPS 2.0 project’s modular approach, where “Amount A” addresses residual profit reallocation for digital giants, whilst Amount B focuses on baseline returns for standard buy-sell operations. This distinction allows jurisdictions to implement these measures independently, providing flexibility in adoption.
How the Amount B pricing matrix works
The OECD’s standardised pricing matrix utilises the Transactional Net Margin Method (TNMM) with return on sales as the key profit indicator. Companies determine their applicable margin through a straightforward three-step process:
Industry classification system
Group 1: Perishable foods, groceries, household consumables, construction materials Group 2: IT hardware, electrical components, clothing, pharmaceuticals, consumer electronics Group 3: Medical and industrial machinery, industrial vehicles, specialised tools
Factor intensity calculations
The framework considers two critical ratios:
- Operating Asset Intensity (OAS): Operating assets divided by net revenue
- Operating Expense Intensity (OES): Operating expenses divided by net revenue
Based on these calculations and industry grouping, predetermined margins range from 1.5% to 5.5%, providing clear benchmarks that eliminate lengthy comparable searches.
Implementation timeline and global adoption
Unlike Amount A, which requires multilateral treaty ratification, Amount B operates through the OECD Transfer Pricing Guidelines’ soft law framework. This means countries can adopt the provisions unilaterally for fiscal years beginning 1 January 2025.
Early adopters include France, the Netherlands, and Indonesia, with additional jurisdictions expected to implement the framework throughout 2025. This staggered adoption creates opportunities and challenges for multinational tax planning strategies.
Benefits for multinational corporations
Administrative efficiency
The formulaic approach dramatically reduces documentation requirements and audit complexity. Rather than conducting extensive comparable analyses, companies can apply predetermined margins with confidence in their arm’s length nature.
Enhanced predictability
Fixed margins provide certainty in tax planning and reduce the risk of transfer pricing disputes. This predictability becomes increasingly valuable as tax authorities worldwide adopt more aggressive audit strategies.
Cost reduction
Simplified compliance procedures translate directly into reduced professional fees and internal resource allocation, particularly beneficial for mid-market companies with limited tax departments.
Challenges and practical considerations
Eligibility requirements
Companies must carefully evaluate whether their distribution activities qualify as “routine.” Operations involving significant value-adding functions, such as marketing development or customer relationship management, may fall outside Amount B’s scope.
Data segmentation
Accurate implementation requires precise separation of eligible distribution activities from other business functions. Companies providing mixed services must develop robust systems to isolate qualifying transactions.
Operating expense guardrails
The framework includes safeguards preventing unrealistic profit-to-expense ratios. Companies operating near these thresholds must monitor their metrics carefully to avoid unexpected adjustments.
Strategic implications for tax planning
Jurisdictional considerations
The optional nature of Amount B creates a patchwork implementation landscape. Companies must evaluate each jurisdiction’s adoption status and consider the implications of mixed approaches across their distribution networks.
Traditional method interaction
Amount B doesn’t replace existing transfer pricing methods entirely. When reliable internal Comparable Uncontrolled Price (CUP) transactions exist, these may take precedence over the standardised matrix.
Future development: Amount C
Tax professionals anticipate the eventual introduction of Amount C, which would address distributors performing functions beyond the baseline return. This development could further reshape transfer pricing strategies for more complex operations.
Expert perspective: Kreston Global expert analysis
Martin Bonner, Managing Partner at AREA Bollenberger and Chair of the Kreston Global Transfer Pricing Group, emphasises that the Consolidated Report represents “more than just a tidy PDF—it marks the point when the OECD’s promised transfer pricing shortcut became usable, verifiable, and ready for worldwide rollout.”
Jelena Mihić Munjić, Managing Director at Kreston MDM Serbia – Kreston Global, notes that the framework’s success depends on carefully navigating implementation nuances while combining simplified tools with traditional transfer pricing methods.
Looking ahead: The future of transfer pricing
Amount B’s introduction signals a broader shift towards formulaic approaches in international taxation. If widely adopted, this framework could serve as a template for addressing other routine functions, potentially extending beyond distribution activities to manufacturing and service operations.
The success of Amount B implementation will largely determine the appetite for more ambitious formula-driven solutions in future OECD initiatives. For multinational corporations, early adoption consideration and strategic planning become crucial for maintaining competitive advantages in an evolving tax landscape.
Conclusion
Amount B reflects a broader shift towards standardised, formula-driven tax measures. If widely adopted, the framework may provide a model for applying similar approaches to other routine functions, such as manufacturing or low-risk services.
The success of Amount B will influence future OECD initiatives. Early adoption and informed planning may help multinationals secure compliance efficiencies while managing tax risk in an evolving global landscape.
For expert guidance on Amount B implementation and transfer pricing strategy, multinational corporations should consult one of our experienced tax professionals who understand both the opportunities and complexities of this framework.
