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Submission on OECD Consultation paper on Pillar One - Amount B
Submission on OECD Consultation paper on Pillar One - Amount B

September 1, 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 two alternatives to scope - “Alternative A”, which does not require a separate qualitative scoping criterion to identify and exclude non-baseline contributions, and “Alternative B”, which does require a separate qualitative scoping criterion to identify and exclude non-baseline contributions. 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 distribution of digital products [such as Software as a Service] as part of the framework, berry ratio cap-and-collar approach ratio should be backed by a detailed calculation of interquartile range of results of wholesale distribution activities across industries in a particular country/ region, adopting pricing matrix based on a cluster of jurisdictions viz. Europe,
USA, Asia Pacific etc. rather than adopting a single global dataset, amongst others.

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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20230901-oecdpillar1amountb-consultation-nasscomsubm.pdf

Tejasvi

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