We believe that the Consultation Document offers useful additional guidance in discussions between taxpayers and tax administrations regarding baseline marketing and distribution activities (“BMDA”). In addition, the view of implementing Amount B as a safe harbour would simplify the process for determining the markup level for the BMDA in accordance with the arm’s length principle. Therefore, we do believe that Amount B contributes (to some extent) to reducing recourse-intensive disputes. However, we also believe that the OECD has not fully accomplished its goal to reduce resource intensive disputes between taxpayers and tax administrations.

In our submission we ask attention for:  
  1. That most resource-intensive transfer pricing disputes regard “accurately delineating the
    controlled transaction”, i.e., scoping criteria. 
  2. The scoping criterium concerning differences in market sizes might impact the choice of location for local distribution entities.
  3. Adding as criterium the level of competitiveness of a market. As the level of competitiveness impacts the at arm’s length result substantially.
  4. Suggestions to increase tax certainty for taxpayers.

The document submitted to the OECD was prepared by Svitlana Buriak, Jan Willem Kunen, Juan Manuel Vázquez, Rijk van Tongeren, Harmen van Dam and Steffanie van der Kroon.

To read the document in full, please click on the download button provided below.


Public Consultation

Document on Amount B of Pillar One