Transfer Pricing for Mining Multinationals’ Affiliates

Although the OECD Public Consultation Document on Pillar One — Amount B attempts to simplify the transfer pricing of certain wholesale marketing and distribution activities by providing agreed returns, the model contains some shortcomings. As noted in the OECD release, Amount B does not apply to the distribution of commodities, and this exclusion is appropriate given the shortcomings of the OECD’s proposed pricing matrix for Amount B. This article proposes a new general model under an arm’s length standard and discusses the implications under this model to multinationals that mine diamonds, copper, and iron.

Proposed Pricing Matrix for Amount ...