Amount B is the OECD's simplified way to set transfer prices for routine wholesale distributors. Instead of a full benchmarking study, you look up your distributor's profit margin in an OECD table based on its industry and cost structure. It applies to fiscal years starting on or after January 1, 2025, but only in countries that choose to adopt it. If your company sells through a foreign distribution subsidiary, this may replace the transfer pricing study for that entity.
Traditional benchmarking vs. Amount B
| Traditional benchmarking study | Amount B | |
|---|---|---|
| How the price is set | You find comparable independent distributors and build a profit range | You look up a return-on-sales margin in the OECD table |
| Cost | A study for each distributor, each year | Far less work once you confirm you qualify |
| Disputes | Tax authorities often challenge your comparables | The margin comes from an agreed OECD framework |
| Availability | Works everywhere | Only where the country has adopted it |
What Amount B actually is
Transfer pricing is the set of rules for prices between related companies. When your US company sells goods to its own subsidiary in another country, the price has to be arm's length, meaning what unrelated companies would charge each other. Proving that usually means a benchmarking study: finding independent distributors that look like yours and copying their margins.
Amount B skips the hunt for comparables. The OECD published it on February 19, 2024, as part of Pillar One of its two-pillar tax deal, and folded it into the OECD Transfer Pricing Guidelines as an annex to Chapter IV. A consolidated report followed in February 2025. The idea is simple: for plain, routine distributors, the OECD publishes the answer in a table. You classify your distributor, read off the margin, and you are done.
The OECD built this mainly for countries with small tax administrations. Its own numbers say 30 to 70 percent of transfer pricing disputes in some low-capacity countries involve exactly these routine distribution activities.
Who qualifies
Amount B is not for every related-party transaction. It covers a narrow case, and the boundaries matter.
First, the transaction has to be buy-sell wholesale distribution. Your distributor buys goods from a related company and resells them to unrelated customers. That is the qualifying transaction.
Second, the distributor has to be baseline, meaning routine. It takes orders, holds inventory, and does basic marketing. If it does more than that, it is out. Distributors that develop their own marketing intangibles, do meaningful manufacturing or research, or mainly sell services or digital products rather than physical goods do not fit the baseline mold.
Third, the OECD measures "baseline" with two ratios, each calculated as a three-year weighted average: net operating asset intensity (how asset-heavy the distributor is) and operating expense intensity (how expense-heavy it is). These ratios decide both whether you are in scope and which row of the table you land in.
Take a simple example: a subsidiary that buys finished parts from its US parent and resells them to local wholesalers, with a warehouse and a small sales team, is the classic candidate. A subsidiary that also designs the product, runs the regional brand, and sells software subscriptions is not.
How the pricing works
Once you confirm the distributor qualifies, the mechanics are straightforward.
You sort the distributor into an industry group and measure its two intensity ratios (net operating asset intensity and operating expense intensity, each on a three-year weighted average). The OECD table then gives you the arm's length return on sales for that combination. Return on sales just means operating profit divided by sales. If the table says the margin is in a given band, your distributor's intercompany price must leave it with that margin.
There is also a cross-check based on operating expenses, which caps the result so that an unusual cost structure does not produce a strange answer. You do not need to agree with every line of the OECD's math to use it. The point is that both you and the tax authority are reading from the same table, which is what cuts disputes.
One honest note: the table gives you the margin, not the strategy. It will not tell you whether your distribution structure still makes sense. It only prices the one you have.
Where things stand in 2026
Each country decides for itself whether to adopt Amount B, and in what form. Three patterns have emerged.
Some let taxpayers elect it. Singapore is the clearest example: qualifying taxpayers may apply the simplified approach for financial years 2026 through 2028.
Some apply it as the required method. Belgium folded the Amount B guidance into its rules for fiscal years beginning on or after January 1, 2025.
Many take a middle path: they will not apply Amount B at home but will respect it when the other country does. Brazil, Costa Rica, Iceland, Norway, and South Korea are in this camp. Luxembourg confirmed in April 2026 that it will respect Amount B outcomes from covered jurisdictions where a tax treaty is in force, and France limits its acceptance to developing nations that adopted it and have a treaty with France.
Then there is the list of 66 covered jurisdictions, mostly low- and middle-income countries including Brazil, Mexico, Argentina, Nigeria, and Thailand. Every member of the OECD's Inclusive Framework has committed to accepting an Amount B outcome when the distributor sits in a covered jurisdiction. Croatia and Greece are still deciding.
Before you rely on Amount B for any transaction, check the OECD's transfer pricing country profiles, updated in January 2026, for both countries involved.
Amount B or a full benchmarking study?
This is the decision most mid-market CFOs actually face. Here is how to think about it.
Choose Amount B when your distributor is plain-vanilla wholesale, the country has adopted it, and you want lower compliance cost and fewer audit fights. In covered jurisdictions, the political commitment behind it gives you real certainty.
Keep the full benchmarking study when the distributor does more than baseline functions, when the country has not adopted Amount B, or when the table gives you a worse margin than a proper study would support. In elective regimes you can choose the better answer, so run both numbers before you elect.
Watch the counterparty problem. An Amount B outcome is generally not binding on the other country, so if the parent's country does not respect it, you can face double tax on the same profit. Outside the covered jurisdictions, check whether a tax treaty and the mutual agreement procedure give you a way out before you commit.
If you are rethinking where distribution functions sit, that is a cross-border tax structuring question, worth modeling before you move people or inventory.
What to do now
Start with a map. List every foreign subsidiary that buys from a related party and resells to third parties, then ask three questions of each one: is it baseline or does it do more? Has its country adopted Amount B, and in what form? What margin does the OECD table give it, and how does that compare with your current pricing?
If the table gives a better or equal result with less work, electing Amount B is an easy win. If it gives a worse result, keep your benchmarking study and document why. Either way, write the analysis down. Tax authorities respect a file that shows you considered the simplified approach and chose deliberately.
Our transfer pricing team handles both paths: full benchmarking studies and Amount B scoping and elections. If you already have studies in place, our transfer pricing compliance services can fold the Amount B check into your next documentation cycle. And because Amount B sits inside the OECD's two-pillar project, read it alongside our Pillar Two guide so the pieces stay consistent.
Frequently asked questions
Is Amount B mandatory?
No. Each jurisdiction chooses whether to let taxpayers elect it, require it, or ignore it entirely. Your answer depends on the country where the distributor sits.
We are a US company. Does Amount B affect us?
It can, through your foreign distributors. Amount B is adopted country by country, so what matters is where the distributor is, not where the parent company is. Check the OECD country profiles for each country in the transaction.
What if the two countries disagree on the price?
An Amount B outcome is generally not binding on the counterparty jurisdiction. For distributors in the 66 covered jurisdictions, Inclusive Framework members have committed to respect the outcome. Outside that, a tax treaty with a mutual agreement procedure is your safety net.
Can we still do a traditional benchmarking study instead?
Yes. Amount B is an alternative, not a replacement for the arm's length principle itself. Where a country has not adopted it, or your distributor falls outside the scope, the traditional study remains the way to support your price.
When did Amount B take effect?
The OECD framework applies to fiscal years beginning on or after January 1, 2025, in countries that adopt it. Singapore's elective regime, for example, covers financial years 2026 through 2028.
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