2025 Global Transfer Pricing Updates: OECD Amount B and Important Country Updates

Transfer pricing regulations continue to evolve across the globe, with tax authorities refining documentation requirements, introducing new compliance timelines and weighing the adoption of the Organization for Economic Cooperation and Development’s (OECD’s) Amount B simplified approach. Recent updates from Canada, Mexico, Germany, the U.S. and Australia highlight shifting expectations that may affect multinational enterprises’ tax planning, documentation and intercompany pricing strategies.

United States: Proposed Adoption of Amount B

On December 18, 2024, the Internal Revenue Service (IRS) and the U.S. Department of the Treasury released Notice 2025-4, outlining their intention to add a new transfer pricing methodology under Section 482. This method aims to align the U.S. transfer pricing regulations with the OECD) Pillar One: Amount B Report, developed to simplify taxpayer application and tax authority administration of the arm’s length principle (ALP) for baseline marketing and distribution activities.

The notice allows eligible U.S. taxpayers to elect the SSA for pricing qualified activities. However, qualifying for the SSA involves both qualitative and quantitative criteria, adding layers of analysis for electing this safe harbor. The notice provides guidance on qualification criteria, explains the election statement to be filed with the tax return and summarizes transfer pricing documentation needed to support an SSA election.

Qualified taxpayers can elect this safe harbor for tax years beginning on or after January 1, 2025. The safe harbor election of the SSA for fully qualified transactions and its appropriate application should meet the “best method” requirement necessary to comply with U.S. documentation requirements under Section 1.6662-6(d)(2)(iii). However, it involves various specific considerations that taxpayers should thoroughly evaluate and document.

Canada and Mexico: OECD Transfer Pricing Country Profile Updates

On July 22, 2025, the OECD released transfer pricing country profiles updates. These profiles use a uniform questionnaire to capture each country’s specific transfer pricing regulations.

The latest updates for Canada and Mexico provide new information on country-specific legislation related to the OECD Pillar One: Amount B Report’s simplified and streamlined approach (SSA) for marketing and distribution activities. Similar to the U.S., which released Notice 2025-4 on December 18, 2024, countries are assessing how to treat and implement the SSA. As of July 2025, Canada does not allow application of the SSA for marketing and distribution activities but will respect the outcome from the SSA by a covered jurisdiction. Mexico is still considering the SSA’s application and process but also respects outcomes similar to Canada. Mexico is anticipated to release further guidance on the implementation and introduction of the SSA in the second half of 2025.

Companies evaluating qualifications for Amount B as a U.S. safe harbor or companies assessing its application for foreign distribution subsidiaries should also consider the Amount B implications in any corresponding jurisdictions involved in relevant related-party tangible goods transactions.

Germany: Revised Transfer Pricing Documentation Requirements

Effective January 1, 2025, Germany has introduced notable changes to its transfer pricing compliance regulations, emphasizing new requirements, shortened submission deadlines and increased penalties.

One key change is the mandate for a “transaction matrix” to serve as the central element of local transfer pricing documentation. This matrix must outline crucial details such as transaction overview, identification of involved parties (recipient and provider identification), volume and remuneration, contractual basis, transfer pricing methodology, relevant tax jurisdictions and any nonstandard taxation applicability.

Germany has also implemented revised submission timelines for transfer pricing documentation, including local and master files that adhere to local transfer pricing thresholds. Local transfer pricing documentation must now be submitted within 30 days of receiving a tax audit notification, and tax authorities can request documentation at any time. Previously, submission was required within 60 days and solely upon request during a tax audit. Additionally, the same 30-day submission requirement applies to the master file and documentation for extraordinary business transactions.

To enforce compliance, Germany has introduced penalties for late submissions and noncompliant transfer pricing documentation. This regulatory shift underscores the importance of multinational enterprises (MNEs) engaging in cross-border transactions in the country to evaluate their transfer pricing documentation diligently and ensure proactive and timely preparation of all three required documents. By adapting to these new regulations, MNEs can effectively navigate the evolving tax landscape and mitigate potential compliance risks.

Australia: Australian Tax Office Guidance on Intercompany Transaction Scrutiny

In today’s tax landscape, MNEs and their intercompany transactions often face heightened scrutiny from tax authorities, resulting in lengthy and burdensome tax audits. In December 2024, the Australian Taxation Office (ATO) issued guidance identifying certain intercompany transactions that may attract ATO scrutiny. These transactions include related-party financing, intangible assets, controlled foreign entities, thin capitalization rules and nonresident withholding tax on interest, dividends or royalties.

The ATO’s guidance further emphasizes the importance of accurate reporting to mitigate risks associated with intercompany transactions. Such risks include non-arm’s length terms or conditions, incorrect characterization of intangible assets and misrepresentation of an entity’s functions, assets and risks. MNEs should continue to monitor and reassess their intercompany pricing strategies and ensure they maintain adequate transfer pricing documentation, including intercompany agreements.

Weaver Can Help Ensure Alignment and Compliance

Transfer pricing rules are continuing to become more complex as countries adopt new documentation requirements, adjust deadlines and consider OECD’s Amount B framework. Whether your organization operates in one jurisdiction or across multiple countries, staying compliant requires careful planning, consistent documentation and awareness of local regulations. Contact us. We can help you evaluate the impact of these updates, align your transfer pricing policies with current requirements and prepare the necessary compliance documentation to support your positions.

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