Luxembourg Tax Agency Issues Circular Clarifying Arm’s Length Approach Under OECD Pillar 1 Amount B

The Luxembourgish Inland Revenue April 13 issued Circular L.I.R. No. 56/2–56bis/2, clarifying the arm’s length approach for Amount B Reports under OECD Pillar One. The circular includes: 1) a clarification that covered transactions by taxpayers resident in a covered jurisdiction that applies Amount B to determine remuneration will meet the arm’s length principle, subject to conditions; 2) a chart illustrating Luxembourg’s application of Amount B principles; 3) a list of transactions covered by Amount B, subject to the requirements that the arm’s length price can be reliably determined, and that the tested party is a distributor or sales agent with ...