Allocation Keys are a key aspect of the Amount A Revenue Sourcing Rules, which attribute revenue to the jurisdictions an MNE group operates in. This is then used when determining how much profit is reallocated to a jurisdiction.
The marketing and distribution profits safe harbour is included in Articles 6(3)-(6) of the Progress Report on Amount A of Pillar One. It is deducted
Although Pillar One and Pillar Two are largely separate, the draft Pillar One rules issued by the OECD on July 11, 2022 include some interesting overlaps with Pillar Two. Read our analysis of how Pillar One ties into Pillar Two.
On July 11, 2022, the OECD released a progress report on its Two Pillar Solution. This included draft rules on Pillar One. Whilst these draft rules are subject to a consultation, they nevertheless make interesting reading, particularly as there has, to date, been very little detailed information on the marketing and distribution profits safe harbour. Use our Pillar One profit allocation calculator to see the impact of the profit reallocation and marketing and distribution profits safe harbour.
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