OECD gives progress update on Pillar One

The Co-Chairs of the Inclusive Framework on BEPS (IF) have issued a progress update on Pillar One.

On Amount A (allocation of taxing rights) the update recaps work leading to the revised multilateral convention text for adoption and confirms the current position of majority support but with some objections remaining around lack of consensus having been reached on Amount B.

Discussions are continuing on a framework for Amount B (transfer pricing/arm’s length principle for baseline marketing and distribution activities) set against the context of some members taking a position that the framework is an essential part of the overall Pillar One package (in essence following the principle that ‘nothing is agreed until everything is agreed’). One key challenge reports the IF is around how to address concerns in some jurisdictions that the pricing matrix ‘delivers inappropriate outcomes for taxpayers performing baseline marketing and distribution activities...