France will restrict the use of the OECD’s Amount B transfer pricing method to transactions with developing nations that have adopted the method and have a bilateral tax treaty with France, excluding non-qualifying jurisdictions.

France announced, on 23 July 2025, that it will limit the use of the OECD’s simplified transfer pricing method, Amount B, to transactions with developing nations that have adopted the method and have a bilateral tax treaty with France.

The policy excludes transactions with non-qualifying jurisdictions, regardless of whether they adopt the method.

The Amount B Report introduces a simplified method, known as “Amount B,” for applying the arm’s length principle to low value-creating marketing and distribution activities within multinational enterprises. It focuses on supporting low-capacity countries with limited resources.

Earlier, the OECD published a comprehensive report on Amount B on 24 February 2025.

As part of the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy agreed by the OECD/G20 Inclusive Framework on BEPS in October 2021, 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, with a particular focus on the needs of low-capacity countries.   This consolidated report incorporates the agreed materials on Amount B that have been released by the Inclusive Framework since February 2024 up until December 2024.

In October 2021, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework) agreed to simplify and streamline the application of the arm’s length principle to in-country baseline marketing and distribution activities, with a particular focus on the needs of low-capacity jurisdictions.

Following that mandate, this report contains the guidance on “Special considerations for baseline distribution activities”, which is incorporated into the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022 as an Annex to Chapter IV. The simplified and streamlined approach outlined in that guidance is expected to enhance tax certainty and relieve compliance burdens for taxpayers and tax administrations alike, particularly those in low-capacity jurisdictions facing limited resources.

Key points include:

Scope

Section 3 of the Amount B Report outlines the scope of the scheme, which encompasses transactions conducted by certain distributors of goods, including commission agents and commercial agents, who procure supplies from one or more related foreign companies for wholesale resale to third parties. This section details the various qualitative and quantitative criteria that delimit the scope of Amount B.

Excluded in particular are transactions involving intangible assets, services, or commodities, as well as those in which distributors make unique and valuable contributions or assume economically significant risks.

Transfer Pricing Method 

Section 4 of the Amount B report identifies the transactional net margin method as the most appropriate transfer pricing method for remunerating transactions that fall within the scope of Amount B.

Pricing Methodology

Section  5 of the Amount B Report sets out the terms and conditions for setting the price of transactions eligible for Amount B. The methodology is based on a price matrix compiled from a global data set of companies involved in benchmark marketing and distribution activities. This matrix considers the distributor’s sector of activity, its operating expenses, and the level of its operating assets.

Price Adjustment Mechanisms 

Two price adjustment mechanisms, which may be implemented on a case-by-case basis depending on the circumstances specific to the transaction to be analysed, are also provided:

  • Cross-Checking of Operating Expenses: Section 5.2 of the Amount B Report) provides for a “cross-checking of operating expenses” mechanism that allows the target remuneration obtained from the price matrix to be adjusted when its application gives a result that falls outside a predefined operating expense cap range;
  • Data Availability Mechanism: Section 5.3 of the Amount B report) provides for a “data availability mechanism” that allows for upward adjustment of the remuneration obtained from the price matrix based on the sovereign debt rating.

Commitment to respect the result obtained when a country with low capacity applies Amount B

France has committed to respecting the results of the Amount B approach when applied by low-capacity countries with which it has a bilateral tax treaty. This includes honouring the outcomes for relevant transactions and taking reasonable measures to prevent double taxation.

The commitment is effective for fiscal years commencing on or after 1 January 2025.