New Guidance: the Dutch Position on OECD Pillar One Amount B

On 4 December 2024, the Dutch State Secretary of Finance published a decree outlining the Netherlands' position on the implementation of Amount B under OECD Pillar One (the Decree). This Decree enters into effect as of 1 January 2025. Key points:

• The Netherlands will not introduce Amount B for domestic taxpayers engaged in routine marketing and distribution activities;
• The Netherlands has committed itself to accepting the outcome of the application of Amount B when applied correctly by an affiliate in a 'covered jurisdiction' that has implemented Amount B, while the jurisdiction has a bilateral tax treaty with the Netherlands which is in force.

The Decree is especially welcome for Dutch principals or master distributors with local limited risk distributors or agents in covered jurisdictions that have implemented Amount B and that are based in one of the many countries that have a bilateral tax treaty with the Netherlands. The OECD is expected to soon publish a list of countries implementing Amount B. Clients engaged in routine marketing and distribution activities should review their transfer pricing policies and assess the potential impact of Amount B, considering the status of a jurisdiction as being a 'covered jurisdiction' as well as whether the jurisdiction is a tax treaty partner.

If you have any questions or would like to understand in more detail the impact of Amount B for your distribution activities, please contact the authors.

Background on Pillar One Amount B

OECD Pillar One Amount B provides for a simplified and streamlined approach to the application of the arm’s length principle to in-country baseline marketing and distribution activities for physical goods (excluding commodities). 

The simplified and streamlined approach is expected to enhance tax certainty and to relieve compliance burdens for taxpayers and tax administrations alike, particularly those in low-capacity jurisdictions facing limited resources and where comparables are limited. Countries can choose if and how to implement Amount B in their national legislation.