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OECD: Submission on Amount B under Pillar One
OECD: Submission on Amount B under Pillar One

January 25, 2023

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The OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing (BEPS) has been working to develop a consensus-based solution to address tax challenges arising out of digitalisation of the economy. Amount B of Pillar One is intended to streamline the process for pricing baseline marketing and distribution activities in accordance with arm’s length principle, thereby aiming at enhancing tax certainty and reducing resource-intensive disputes between taxpayers and tax administrations.

The OECD released this consultation paper outlining the main design elements of Amount B, i.e. the scope, the pricing methodology and the current status of discussions concerning an appropriate implementation framework. Based on inputs from Industry, NASSCOM made a detailed submission to the OECD and Ministry of Finance (MoF).

As part of our submission, we have requested OECD to include transactions undertaken in relation to intangibles and services within the scope of Amount B of Pillar One. In such cases, the scope should be limited to buy-sell transactions and transactions where licensees have the limited right to replicate the software or provide keys to the users. In such cases, OECD should prescribe lower margins for marketing and distribution activities. In terms of the margins, we have requested OECD to prescribe Amount B in the form of a range rather than fixed margins.

Copy of our submission to OECD and MoF is attached for your reference. For more information, reach out to tejasvi@nasscom.in
 


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20230125-oecd-amountb-nasscomsubm.pdf

Tejasvi

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