Amount B, finalised under the OECD/G20 Inclusive Framework, targets one of the most disputed and highest-volume categories of intercompany transaction: baseline marketing and distribution activity. Rather than requiring a fresh benchmarking study for every routine distributor in every jurisdiction, Amount B offers a simplified, formula-driven return intended to reduce both compliance cost and the sheer volume of low-value distributor disputes that consume disproportionate tax authority and taxpayer resources.
Which Transactions Amount B Covers
Amount B applies to baseline wholesale distribution, sales agency, and commissionaire arrangements where the entity does not carry economically significant intangibles, does not assume more than a defined level of inventory or credit risk, and does not perform any activities beyond marketing and distribution of tangible goods. Distributors performing additional functions, such as meaningful manufacturing, significant R&D, or holding valuable local intangibles, fall outside its scope and continue to require a conventional functional and benchmarking analysis.
The Pricing Matrix Mechanism
Rather than a single fixed markup, Amount B applies a pricing matrix that adjusts the expected operating margin based on the tested party's industry grouping and a set of financial ratios, principally operating asset intensity and operating expense intensity, that serve as objective proxies for the distributor's actual functional profile within the qualifying baseline category. This is intended to preserve some differentiation between distributors of genuinely different intensity while avoiding a full bespoke benchmarking exercise for each one.
Adoption Is Elective, Not Universal
Critically, Amount B is not mandatory under the OECD framework itself; individual jurisdictions choose whether to adopt it, and where they do, whether to apply it only for inbound transactions, only for outbound, or both. A group operating a distributor in a jurisdiction that has not adopted Amount B cannot rely on the simplified matrix there regardless of how the counterparty jurisdiction treats the same transaction, which means the practical benefit of Amount B currently depends heavily on which specific country pairs are involved.
Interaction with Existing Local Rules and APAs
Where a jurisdiction already operates its own safe harbour regime, or where a distributor's pricing is already covered by an existing bilateral or unilateral APA, groups need to work through how Amount B interacts with, rather than simply replaces, those existing arrangements. In several early-adopting jurisdictions, taxpayers retain an election to apply either Amount B or their existing benchmarking approach, which means the analysis is not purely mechanical, groups should model both outcomes before defaulting into the simplified approach purely for compliance convenience.
Practical Steps Before Relying on Amount B
Before adopting Amount B for any given distributor, a group should confirm bilateral adoption by both the distributor's jurisdiction and the counterparty's, verify the distributor genuinely falls within the qualifying baseline scope rather than performing functions that would exclude it, and run a comparison against the group's existing benchmarking outcome to confirm the matrix result does not produce a materially different, and potentially less defensible, margin than the conventional analysis would support.
Conclusion
Amount B offers a genuine simplification opportunity for qualifying baseline distributors, but only where both relevant jurisdictions have adopted it and the distributor's actual functional profile falls cleanly within its intended scope. Groups should treat the pricing matrix as one input to compare against a conventional benchmarking outcome, rather than an automatic default, until adoption becomes more consistent across the group's key trading jurisdictions.
