US Notice on application of the Simplified and Streamlined Approach

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16 December 2024, the US Treasury Department and the Internal Revenue Service issued Notice 2025-04 announcing their intention to issue regulations that would provide a new method under the US tranfer pricing rules in Section 482 for pricing certain controlled transactions that involve baseline marketing and distribution activities.

The new method, referred to in the notice as the Simplified and Streamlined Approach (“SSA”), is based on OECD’s Pillar One – Amount B report from February 2024.

 






Related Guidelines

  1. TPG2024 Chapter IV Annex III paragraph 54Where a tested party is located in a qualifying jurisdiction, an adjustment will be made to the return initially determined under Section 5.1 and Section 5.2 where applicable. A relevant taxpayer in an aforementioned qualifying jurisdiction will earn an adjusted return in accordance...
  2. TPG2024 Chapter IV Annex III paragraph 6060. The following items of information may already be included in the local file and can be particularly relevant and useful to tax administrations in assessing whether the taxpayer’s qualifying transactions meet the scoping criteria, and, if the taxpayer applied the pricing methodology,...
  3. TPG2024 Chapter IV Annex III paragraph 6161. In relation to the information item in 60(b), where it is consistent with the scoping criteria and the conduct of the parties, the provision of a written contract would ease the administration of the simplified and streamlined approach when a taxpayer is...
  4. TPG2024 Chapter IV Annex III paragraph 6262. Financial information on the tested party is needed to understand whether the qualifying transaction meets the scoping criteria, irrespective of whether the tested party is a domestic or foreign entity. Accordingly, the taxpayer will also need to provide the annual financial accounts...
  5. TPG2024 Chapter IV Annex III paragraph 6363. Where one or more items of information relevant to assess the application of the simplified and streamlined approach are not included as part of the transfer pricing documentation, tax administrations may require taxpayers to provide them upon request. Importantly, making this information...
  6. TPG2024 Chapter IV Annex III paragraph 6464. In addition to the information in the local file, taxpayers and tax administrations should leverage the information provided in the master file to support their position with regards to the application of the pricing approach. In particular, the master file can provide...
  1. OECD releases the report on Amount B of Pillar OneOn 19 February 2024, the OECD/G20 Inclusive Framework on BEPS released the report on Amount B of Pillar One, which provides a simplified and streamlined approach to the application of the arm’s length principle to baseline marketing and distribution activities, with a particular...
  2. OECD releases Consolidated Report on Amount BThe Consolidated report on Amount B compiles all relevant materials published by the Inclusive Framework throughout 2024. The content of the original publications has not been amended or modified; the Consolidated Report on Amount B simply replicates the original content for ease of...

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