OECD Pillar One: Amount B—Simplified transfer pricing for distribution activities

On 19 March 2026, the Belgian tax authorities published Circular 2026/C/45 (Dutch | French), an addendum to the existing transfer pricing Circular 2020/C/35, that provides guidance on the application of a simplified and streamlined transfer pricing approach for routine marketing and distribution activities. This approach, known as OECD Pillar One: Amount B, was developed by the OECD and endorsed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (“inclusive framework”). The circular has retroactive effect for transactions from 1 January 2025 onwards.

This simplified approach is designed to reduce compliance burdens for both taxpayers and tax authorities while increasing tax certainty for companies engaged in routine distribution activities across multiple jurisdictions.

What is OECD Pillar One: Amount B?

In October 2021, the inclusive framework agreed to simplify and streamline the application of the arm’s length principle to certain marketing and distribution activities. Following extensive analysis, the OECD published detailed guidance in February 2024 on this “Amount B” approach.

The Belgian tax authorities have now adopted this approach and clarified how it will be applied in Belgium. The circular confirms that Belgium will accept the results of this simplified approach when applied by other “covered jurisdictions” (jurisdictions that have committed to Amount B), provided certain conditions are met.

Therefore, companies should begin reviewing their transfer pricing policies and documentation now to ensure compliance.

What does the simplified approach cover?

The simplified approach applies to specific types of routine distribution activities:

• Routine distribution transactions: Where a distributor purchases goods from related companies and resells them to independent customers (wholesale distribution); and

• Trading agent and commission agent activities: Where agents participate in the wholesale distribution of goods on behalf of related companies to independent customers.

Moreover, it must be stressed that the approach focuses on the functions, assets, and risks of the parties involved, not on the specific characteristics of the products being distributed.

Who is affected?

The simplified approach applies when:

• Both jurisdictions are “covered”: The transaction involves a covered jurisdiction that has implemented the approach in its national law;

• A tax treaty exists: There is a bilateral tax treaty between Belgium and the other jurisdiction; and

• The transaction qualifies: The transaction meets the specific criteria outlined in the circular.

The approach does not apply to domestic transactions between two Belgian affiliated entities.

How does the simplified approach work?

Rather than conducting a detailed functional analysis for each transaction, the simplified approach uses a standardised pricing matrix to determine the appropriate profit margin for routine distributors.

The matrix determines the profit margin based on three factors:

• Sector category: The types of products being distributed (three categories are defined in the OECD guidance);

• Operating asset intensity: The level of assets used relative to sales; and

• Operating expense intensity: The level of operating expenses relative to sales.

Based on these factors, the matrix also provides a range of acceptable profit margins. If the distributor’s actual margin falls within this range (with a flexibility of plus or minus 0.5%), the transfer price is considered to meet the arm’s length principle.

Additionally, the approach provides for the possibility that, under certain circumstances, additional adjustments may be applied to the profit margin in the following cases:

• Atypical operating expense levels: Cross-verification procedures ensure that unusual cost structures are appropriately reflected in the analysis; or

• Data availability constraints: Adjustments may be implemented for jurisdictions where market data availability is limited.

Documentation requirements

For qualifying transactions, taxpayers should consider including the following in their transfer pricing documentation:

• Identification of the approach: Clear documentation demonstrating that the simplified approach is being applied;

• Sector classification: The relevant sector category for products;

• Factor intensity calculations: Documentation of operating asset and expense intensity ratios;

• Profit margin determination: How the pricing matrix was applied to determine the profit margin; and

• Supporting analysis: Any additional information supporting the application of the approach.

Key takeaways

• Effective as from 1 January 2025: Belgium has adopted a simplified transfer pricing approach for routine distribution and marketing activities with related parties;

• Documentation required: The transfer pricing documentation should clearly identify whether the simplified approach applies and include the required supporting analysis, including sector classification and factor intensity calculations; and

• Immediate actions to be taken: Taxpayers should assess applicability to their intercompany transactions, review their transfer pricing policies and update them if required, gather supporting data for 2025, and monitor ongoing guidance from the OECD and Belgian tax authorities.

Transfer pricing compliance remains a critical priority for tax authorities worldwide, including the Belgian authorities. Companies engaged in routine distribution or marketing activities with related parties should act promptly to assess whether the simplified Amount B approach applies to their transactions. This requires a thorough review of existing transfer pricing policies, documentation, and supporting data to ensure full alignment with the new regulatory framework. Deloitte’s tax specialists can support taxpayers at every stage, delivering comprehensive solutions that help to address compliance needs and enhance overall tax efficiency.