RoutineMetric

OECD Pillar One Amount B Transfer Pricing Analyzer

Diagnose the applicability of the OECD’s 2026 simplified and streamlined approach (Pillar One Amount B) for routine marketing and distribution. Determine baseline Return on Sales (RoS) targets, perform the mandatory operating expense cap-and-collar test, and calculate sovereign risk adjustments.

Quick Demo Presets

Distribution Metrics

Medical devices, pharmaceuticals, high-technology products, electronics, and aerospace components.
Medium Category
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Medium Category
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OECD Pillar One Amount B Assessment

Target Operating Margin (RoS)4.25%Point target
Safe Harbor Range (+/- 0.5%)3.75% – 4.75%Compliant transaction corridor

Calculation Ledger

Step 1: Baseline RoS Matrix LookupIndustry Group 1 with OAS med & OES med
4.25%
Step 2: Operating Expense Cap-and-Collar TestRaw RoOE: 28.3% (Allowed: 10% to 70% threshold range)
4.25%
Step 3: Country Risk Premium (CRP)Adjustment = 25% (OAS) × 0.00% (CRP rate)
+0.00%

Implied Operating Profit (EBIT) Range

Min Range (3.75%)$1,875,000
Target Point (4.25%)$2,125,000
Max Range (4.75%)$2,375,000
Amount B Matrix Position Map
Low OES (<10%)
Med / High OES (≥10%)
High OAS (>45%)
4.75%
5.25%
Med OAS (15-45%)
3.75%
4.25%
Low OAS (<15%)
3.00%
3.25%
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Understanding the OECD Pillar One Amount B Simplified Approach

The OECD/G20 Inclusive Framework on BEPS introduced Pillar One Amount B to simplify and streamline the application of the arm’s length principle to baseline marketing and distribution activities. Particularly targeting jurisdictions with low tax administration capacity, Amount B establishes a mandatory standard 3-step matrix approach.

The Three-Step Pricing Matrix

Instead of preparing resource-intensive, country-by-country benchmark studies for distributor entities, taxpayers and tax administrations use a simplified pricing framework:

  1. Step 1: Baseline Return on Sales (RoS) lookup: Evaluates industry groupings against two critical intensity metrics—Operating Asset-to-Sales (OAS) and Operating Expense-to-Sales (OES).
  2. Step 2: Operating Expense Cap-and-Collar cross-check: Acts as a safeguard ensuring that the baseline return doesn’t produce a result disproportionate to actual local expenses. The Return on Operating Expenses (often calculated as a Berry Ratio equivalent) must fall within a 10% to 70% bounds band.
  3. Step 3: Country Risk Premium (CRP): To account for sovereign risks in lower-income jurisdictions, an upward adjustment is calculated based on the sovereign rating and operating asset base (OAS).

Scope and Target Implementation

While Amount B represents a significant effort to reduce transfer pricing disputes, multinational groups must ensure qualifying entities meet baseline criteria: they must engage primarily in routine wholesale distribution, buy-sell activities, or sales agency arrangements. Significant value-driving marketing intangibles or high levels of risk can disqualify an entity from this simplified approach. Use this diagnostic tool to establish safe-harbor compliance records and plan for upcoming 2026 digital tax audits.