Following the OECD’s long-awaited guidance that was issued in December 2022, Pillar One’s Amount B has begun receiving renewed attention. Jessie Coleman, transfer pricing principal with KPMG, joined the “GILTI Conscience” team, led by Skadden PartnersNate Carden and David Farhat, for in-depth discussion on Amount B and what companies should consider.
In this episode of the “GILTI Conscience” podcast, Grand Park Law Group Skadden PartnersDavid Farhat and Nate Carden, along with associates Eman Cuyler and Stefane Victor, discuss Pillar One’s Amount B with Jessie Coleman of KPMG.
In December 2022, the OECD issued documentation providing a much anticipated outline of Amount B, however, many uncertainties still remain surrounding scoping requirements and pricing.There is still much work to be done to address concerns around the drafted Amount B documentation and ensure the new framework will work for both developed and developing countries. However, many countries seem committed to making Amount B a success, including the U.S., as the Treasury has stated it’s very open to input.
- The Amount B consultation document left many with questions. Jessie stated that the December documentation may have been a bit disappointing to many due to its limited scope and exclusions.
- In or out of scope. Many were surprised with the limited scope to qualify for Amount B. For example, tech and pharmaceutical companies found themselves out of scope, and the lack of pricing details and additional documentation requirements added to the complexity and uncertainty for companies in other industries.
- What should companies do to prepare for Amount B? Without knowing the specific percentage for Amount B, companies are challenged to fully prepare or analyze the implications. Jessie suggests that it is not too late for companies to consider if they want to participate in Amount B and let the Treasury and OECD know their thoughts.
Voiceover (00:02):
This is GILTI Conscience: Casual Discussions on Transfer Pricing, Tax Treaties, and Related Topics. A podcast from Grand Park Law Group that invites thought leaders and industry experts to discuss pressing transfer pricing issues, international tax reform efforts and tax administration trends. We also dig into the innovative approaches companies are using to navigate the international tax environment and address the obligation everyone loves to hate. Now your hosts, Grand Park Law Group partners, David Farhat and Nate Carden.
Nate Carden (00:36):
Hi everybody. Nate Carden here with David Farhat, Stefane Victor, and Eman Cuyler. As always, this is GILTI Conscience. Welcome. Today we’re joined by Jessie Coleman of KPMG, who’s going to talk with us a little bit about Amount B. Jessie, welcome. And why don’t you give us a little bit of background about Amount B, which always seems to me to be the forgotten part of the whole pillars exercise.
Jessie Coleman (01:00):
Sure, Nate, happy to. And maybe actually it might help if I explain my background because it might explain why I’m so passionate about Amount B.
David Farhat (01:09):
Yes, please.
Jessie Coleman (01:10):
Yeah. I’m a transfer pricing practitioner at [inaudible 00:01:13]. So grew up doing transfer pricing, an economist, and about four years ago I went to the private side of the World Bank Group, so the International Finance Corporation to restart their tax group. So same mission as the World Bank Group and poverty boost shared prosperity, but investing in the developing world. So while I was there, I think I really focused on just the limited resources that developing countries have.
(01:43):
So the idea that they want to do a lot of the things in the BEPS action plan, but that they struggle. So I think that’s where kind of Amount B really speaks to me. So what is Amount B? Maybe we should take that. So it is part of pillar one. And it’s been part of pillar one, I would say almost forever, so at least since the 2020 blueprint. So it is as compared to Amount A which is that reallocation of taxing rights. It is the idea that transfer pricing is very, very complicated, but we have a lot of transactions that perhaps aren’t as complicated, so routine marketing and distribution functions.
(02:31):
So Amount B was birthed as a way to simplify these routine marketing and distribution functions and to do so though still within the context of the arm’s length principles. So I think that’s going to be important when we talk today. So it’s not just a safe harbor, it has to be within the construct of the arm’s length principle. I think when you said it kind of went silent, as you said, right? We heard about it in October of 2020. It was reiterated in the statements that came out.
(03:04):
So the statements that 135 plus country signed about the principles. So Amount B was not forgotten, but it wasn’t until December of last year that we got any guidance on where it was going. So it’s been a long time that it’s been quiet, but I think for folks in transfer pricing, for me at least, it was maybe the most important part of pillar one. So I’ve been anxiously waiting for it for I guess a couple years.
David Farhat (03:34):
So quick question there, Jessie. You’re saying Amount B is, well, I guess unlike the rest of the pillars kind of in line with the arm’s length principle. So what’s the difference between Amount B and just regular transfer pricing for routine functions?
Jessie Coleman (03:50):
And isn’t that the key issue, David? So if you’re thinking about in the constructs of the arm’s length principle, taking a step back, if the OECD were to put guardrails around what that range should be, if we’re still under the arm’s length construct, you should get the same answer, right? I mean, that’s I think essentially what you are saying, David.
David Farhat (04:15):
Exactly.
Jessie Coleman (04:15):
But you wouldn’t have to go through the whole process to get there. So from my perspective, you wouldn’t have to do the searches, you wouldn’t have to construct the range. Where it’s going to be I think really helpful, which is where there’s been a bit of a question I think is if you think of countries, for example, countries in Africa, there are almost no distribution comparable companies if you look at the databases that we have access to. So no data there.
(04:43):
So I think where it’ll come into play, I mean this is obviously going to be for developing and for developed countries, but if you think of the construct here, we’ve got countries that don’t have comparables, so we’re going to help them out a bit and use a construct of the arm’s length principle, perhaps pulling from more of a regional approach or a worldwide approach. So it’s the arm’s length principle, but we’re going to help all countries essentially be able to achieve this. Although I know there’s some differing thoughts about if that’s possible.
Eman Cuyler (05:16):
Thanks for that, Jessie. Kind of going back to the document, the consultation document that was provided in December of last year, can you just touch on what are some of the notable development that came from that document? For example, I know they expanded in scope entities, so what were some of the key takeaways and just your general thought on that guidance?
Jessie Coleman (05:40):
Sure. It’s a great question. I think, and I don’t think it’s too forward to say this. I think the document in December was a spot of a disappointment to many just because I mean maybe we’ll talk about how it was set up a bit. So there’s the scope part which says who would be in scope to qualify for Amount B. And that if you read through it, I read through it Eman, as it being very limited, not expansive. So it has all these criteria about when you can’t be in Amount B. And some of it too I think was a bit surprising to companies.
(06:22):
For example, all the tech companies are more or less in for Amount A, but if you look at Amount B, they’re actually scoped out. So no software, no technology. For example, if you look at pharma, also scoped out because if you do material regulatory work in country, then you would be scoped out of Amount B. And a lot of exclusion. So if you have one major company in a country, you could also be scoped out. It really was also focused on just wholesale of tangible goods was from what my read was.
(07:02):
So I think that was a little bit surprising. I mean, I do understand one could also see this as almost a first attempt to help simplify transfer pricing, but I think folks expected a little bit of a larger scope there. There’s also the pricing component. So there’s scope and then there’s pricing. And then that consultation draft, it discussed the search process that the OECD did, but they didn’t give any details. So if I’m a company and I’m looking at this, I’m thinking, well, number one, I’m probably not in scope.
(07:38):
And number two though, to know if I want to be in scope, I need to know the pricing and they haven’t given me any information. But some of that also I mean the OECD also used a bunch of databases and there are prohibitions about what you can and can’t publish. So I think that we’re a bit hamstrung there, but I think many companies, they don’t know if they want to be in or out. They don’t know what the pricing is. And then I think another thing that was surprising to me is that they have documentation requirements.
(08:09):
So to prove you are in Amount B, there are more requirements than for example, what we see now in the local file than what companies have always been doing. So with the exception of the economic and analysis, a good example would be you need to look at the financial data of both sides of the transaction, which strikes me as funny if you’ve got a routine distribution function, shouldn’t that be the only financials that matter? But apparently that’s not the case. So I think if that was what was most surprising to me is that the simplification there seemed not to be simplifying.
David Farhat (08:49):
That was going to be my next question, just the obvious question. How is this simplifying anything?
Jessie Coleman (08:54):
Part I think there were lots of comments. I mean, this is the other thing. I do think I mean US Treasury, they’ve made a lot of public statements, they’re very open to input here and I think they’re probably more open to input than they’ve been for a lot of other documents. So I think input has been hard. That documentation requirement is hard.
(09:15):
I think if the scoping piece though, if you were in scope and the price is clearly stated later, that would simplify matters for both countries and for companies. I guess my concern, David, though, is that the way the scoping read, I think some companies were not sure, and they know their facts if they were in scope or not. So I think then don’t we wind up with a bunch of disputes about who’s in and out scope?
Stefane Victor (09:47):
Is there a reason why tech and pharma companies, for example, should be excluded or out of scope?
Jessie Coleman (09:53):
I mean, I guess the idea would be do you think that under the arm’s length principle you can’t accurately measure a range of what a routine distributor in such type of industry would earn? I don’t think necessarily that’s the case, but I think that would be the argument that would be made is that it would be more difficult to measure that or harder to do or perhaps you couldn’t do it on a construct that would fit all companies because that’s the crux of Amount B. It has to work across a range of companies. And we all know from transfer pricing that all companies are all super different. So that’s hard.
David Farhat (10:37):
So to that point, this is supposed to work along with transfer pricing, it’s supposed to be a simplification. How would that work? Is it kind of like the SCM method in the US where you can say, “Okay, these services, we can charge costs, so we can go ahead and do that at cost and we’ll do transfer pricing for something else?” Would that be a similar kind of application where you just have say a cost plus we can put these at cost plus say five to 10, and if it’s five to 10, we’re all going to say it’s okay and push forward. Is it going to look like that or is it going to be something more complicated?
Jessie Coleman (11:12):
Slightly more complicated, but I think similar. So I think first of all, the documentation draft makes it clear. Just I need to talk in the same terms so I get confused. Return on sales they talk about that, although they are amenable to other profit level indicators, but the pricing. They’ve got a couple of different constructs here that they’re thinking about, but high level if you are in scope and how you show you’re in scope is still to be determined, but if you’re in scope, you would be targeting a specific return on sales or different profit level indicator if that would be so, and then that would take those transactions off the table for controversy later on. So that’s how I viewed it. I don’t know if others view it differently.
Nate Carden (11:59):
No, that sounds right. I guess I’m curious from the perspective of countries with less of a base of resources to dedicate to these problems. As David was saying, is this really making it any simpler or have we just turned this into a fight about what constitutes routine activities whether you’re in scope? There are very few companies in the world that don’t have some technology element to what they’re doing, including applications that are designed to help customers better understand the products or have a product experience. There’s still debate about the PLI. What have we really accomplished?
Jessie Coleman (12:39):
I think if I’m a low capacity I’m a developing country, I don’t have the resources to do this. If there’s an easy way to determine if a company is in scope or out of scope, I think this will really, really help them. I think that’s the crux of the matter though. If the scope is so narrow that it never works or if it’s so gray that we’re not sure who’s in and out of scope, then I agree.
(13:08):
We’ve just changed the discussion to a scoping issue. Are you in or out? Which is kind of funny though because so many of the controversy that we have is a discussion about if a tested party is a low risk distributor or exactly. Isn’t that the whole reason a Amount B was created is to take those controversies off the table?
Nate Carden (13:31):
Precisely. You’ve done I’m sure more transfer pricing interviews than I’ve done, but I’ve done my share. I’ve never once had somebody who works in a company say, “I’m routine.” How are we going to know?
Jessie Coleman (13:44):
Well, it’s interesting. So there’s a couple of different ideas on this. So one idea would be to have a uniform contract in place that you could execute that would detail what you would have to do to be a routine entity. And I think that would help at least from a US perspective because in the US we tend to respect contracts more than not.
(14:09):
So I mean that would be one way to have that scope question a little bit more settled. Although not all countries are aligned that that contract should be there. And then you also get back to the guidelines themselves that say, contracts are only the starting point, that you need to really look between the construct how the parties are actually acting. So then you get into that loop issue, Nate, that I think you’re alluding to here.
David Farhat (14:38):
Is this just an issue that’s kind of fundamental to transfer pricing? Transfer pricing is functions, assets, risks. So if we’re saying we’re trying to simplify something you’re kind of walking away from doing that analysis. Is that part of the problem that we’re discussing here that so it’s maybe not unique to necessarily Amount B? It’s just part of the transfer pricing thing is this is typically bespoke. You have to look at your taxpayer, you have to look at their functions, you have to look at their assets and you have to look at their risks.
Jessie Coleman (15:08):
So isn’t that the question though? Do you? So if there’s a bunch of companies exactly that are doing routine functions that you can carve out, and I think this is also where a lot of countries are having issues here, David, by saying that we can carve these out and we can get comfortable enough that we don’t need to do a functions, assets and risk analysis, but we can still determine a price using the arm’s length principle.
(15:37):
And I think where you’re getting to is, well, if you haven’t done the full functions, assets and risks, how do you know? So maybe we can say you can do the functions, assets and risks, look at the scoping of Amount B, determine you’re in, and then maybe you get there, but then have you simplified the process other than taking the controversy off the table? I don’t know if you have.
David Farhat (16:03):
Yeah, and that’s what asking. Because if we’re going to simplify this and still rely on some semblance of the arm length principle, we have to allow for some room in there. There’s going to have to be some things that we throw in the pot that maybe we would not have if we did a more thorough analysis. I think we have to be comfortable with what we lose. We lose some precision with the simplification. And I think we have to get comfortable with the loss of some of that precision because what it sounds like with saying, okay, we have to be precise as to what qualifies is you’re just moving the precision from one place to another and not necessarily simplifying.
Jessie Coleman (16:44):
Yeah, I would agree with you. And I think when you say it that way, it makes me more pessimistic, David, than what it was designed to do.
Nate Carden (16:52):
Let me try to resurrect some optimism because you think I’m a pessimist only because you haven’t heard me talk about Amount A. I actually think Amount B, there’s there is reason to think that we might have some degree of success, but to throw out a controversial idea that you can say is something that is solely your own views or not answer at all, what would happen if we said that Amount B should be limited to countries with an amount of GDP per capita below a certain threshold? Because for me, what I worry about with Amount B is not the way that the countries for which it is designed are going to use it. It’s the high resource countries that are going to treat it as a floor and then work their way up from there. Is that a fair worry?
Jessie Coleman (17:47):
I mean, I think that’s a worry regardless though, Nate, of how it’s implemented. So there are going to be numbers that are going to come out of this analysis. Whether you limit that to countries with a small amount of GDP or not, I’m going to maybe play devil’s advocate what would stop that countries who aren’t able to use it, because you’re saying they have low GDP from using it as a floor for them.
Nate Carden (18:15):
Nothing. But at least you have a basis to stand on as the taxpayer. You can say this doesn’t apply to you wealthy country, you have to actually fight it out on functions, assets, risks because you have the ability to do so. This is designed for countries that don’t have the ability to do that because they’re lower resource.
Jessie Coleman (18:35):
We got the business too. I do think that they were offered this as a way to get some sort of certainty on some of their transactions, Nate. If we’re saying we’re only going to give you certainty for these small countries, that’s not getting them what they think they were promised either. I just don’t think that’s fair to business either to go in that direction.
Nate Carden (18:58):
That’s fair. I hope they get the certainty.
Jessie Coleman (19:00):
And I do think I mean actually it’s interesting we think of optimism or pessimism. I mean, I’m still fairly optimistic. So I said that maybe myself included, were disappointed in that December consultation draft, but I think we have a lot of countries and our own, treasury’s been very clear on this that are very committed to making Amount B a success.
Eman Cuyler (19:24):
Another thing that surprised me on that point about the consultation document is that it didn’t offer anything new in terms of dispute prevention or dispute resolution. So taxpayers are really just left to the APA and MAP things that already exist for this. So I thought that was also interesting that certainty is a really important goal for Amount B, but they didn’t get to that point in December.
David Farhat (19:50):
To that point, Eman, I think APAs and MAP I think are a really good place for something like Amount B, where people can say, “Look, this is simple. We will just kind of deal with it quickly.” The downside to that of course is a lot of the countries we’re talking about, this is supposed to be designed to help. They don’t have as big a treaty network or the resources to enter into the APA process because I can speak from experience with APAs where if you get to a transaction that’s for lack of a better term, simpler or more routine, the debate as hot around that say, “Okay, we can get to a number that we feel comfortable with and move on.”
(20:25):
Again, that isn’t access that some of the smaller jurisdictions have. Going back to your point, Jessie, about getting the big countries on board. For someone like the US where you have the SEM, I think that was one where the US decided to take the hit to benefit business. We don’t want you going into the weeds on something that isn’t going to going to be as material. So yes, we know we’re losing money by letting you charge this at cost, but so be it, we’ll do it that way not to get into that level of detail.
(20:55):
But in that circumstance, the US has taken the hit to benefit business. I don’t think we have that opportunity with the smaller jurisdictions. This is supposed to be raising income for the smaller jurisdictions. So in a sense, someone has to take the hit on the lack of precision. So if we talk about some of the bigger countries getting involved I get a bit worried, and maybe you can help dissuade me from this. I get a bit worried that their interest and what they want to see may not necessarily align with the jurisdictions that this is designed to help.
Jessie Coleman (21:29):
And I think that has been not clearly stated, but if you look at the state of how many developing countries feel about the inclusive framework you can see with the United Nations coming in right now, and I don’t think this is just about Amount B, there is I think just the general concern that’s 2.0 really wasn’t in the best interest of developing countries.
(21:57):
Whether that’s true or not, let’s not debate that here. And I think that that is certainly the case with Amount B as well. And I think the fact that you have a large country like the US that’s so encouraging of it, I think it also breeds many countries to be suspicious. There has to be a winner and a loser. Yeah. Nate’s nodding.
Nate Carden (22:20):
I’ll take what David said, and as I usually do on this show, go from a four to a 10, which is to say, I worry that what Amount B is really trying to do is characterize the activities that are going on in a lot of these parts of the world, which in fact can be very sophisticated markets to try to get into and very difficult markets to try to get into and characterize all that activity as routine so that those countries effectively are left just with routine distributor returns and all the residuals come back to the developed world.
Jessie Coleman (22:55):
So it’s interesting. I would play devil’s advocate there.
David Farhat (22:58):
That was about a four to a 20, just-
Jessie Coleman (23:00):
Yeah, but if you look at consultation document, Nate, there are so many caveats to being in scope. I feel like they’ve scoped out anybody with any activities in some respect.
Nate Carden (23:14):
It’s got to work right, does it? In other words, they’ve either solved that problem with scope or they haven’t, but if they’ve solved the problem with scope, then I’m not exactly sure who gets in anyway, which is your original complaint.
Jessie Coleman (23:29):
Yes, that is my original complaint. And then I see the point. I think there’s a happy medium here, Nate. And I think if we can come up with a price that’s reliable under the arm’s length construct and we are comfortable that the characterization of the entities can be done, then I don’t think there’s a winner and a loser here. I think, David, we get back to your first point is this is just transfer pricing, right?
David Farhat (23:58):
I agree. And I think that’s why I kind of like the SCM as a model for this. We put in some ranges, we talk about functions and at the end of the day you will have some arguments about being in and out and is this function really what the function described? But what I get concerned about is the more precise and the more complexity we add to this, we then get rid of the benefit, but the problem is as transfer pricing people, we almost crave complexity because we need that kind of bespoke analysis to be able to do what we do.
Nate Carden (24:36):
And embrace this simplicity. It doesn’t have to be arm’s length, it just needs to be a number. Give in.
Jessie Coleman (24:44):
I mean, just going back to the political agreement, it needs to be arm’s length though, Nate. I appreciate what you’re saying. Let’s just go to the SCM. Obviously not arm’s length. No one’s going to charge anything else at cost, but we’re not there. That wasn’t the agreement that everybody reached. So it would need a new agreement to embrace the simplicity. I hear you that that would make it.
Nate Carden (25:08):
Simple.
Jessie Coleman (25:08):
The construct would be simple. Return on...
Nate Carden (25:08):
And..
David Farhat (25:17):
It’s interesting to me, and again, this is something we’ve been talking about, how easily the world can throw away the arm’s length standard when they want to, but then hang onto it in certain instances. Because the rest of the pillars, one can argue, has absolutely nothing to do with the arm’s length standard, but Amount B for some reason has to be within that framework.
Nate Carden (25:38):
Just when I thought I’m out, they pull me back in. But that’s right. It’s interesting to me that the one element of the entire pillars exercise that introduces the ostensible complexity of the arm’s length standard is the one that’s designed basically for countries that have the low resources. Amount A is super simple. It’s just math. Everybody’s comfortable with that, but that’s the one that benefits large European countries.
Jessie Coleman (26:14):
it’s not so simple, but I hear you that 10% of 25, that’s simple, but yes.
Nate Carden (26:21):
I was previously an Amount B optimist because I really thought it was accomplishing something for low resourced countries. And so it’s not so much that I’m going to amount be pessimist, is that I’m even more disappointed than you are because what I see happening here is a reluctance to accept simplicity and compromise for the benefit of the taxing jurisdictions that in my view, really need it, that’s to me, what it boils down to.
Jessie Coleman (26:51):
And I don’t disagree with you, Nate. It is disappointing because I can see mean from the work at the World Bank Group, I understand these taxing authorities don’t have the resources. And transfer pricing is hard. You don’t have a database and then they don’t even have any comparable companies, even if they have the database. So what are they to do? So yes, this could really, really benefit them
David Farhat (27:18):
To quote Luther Vandross, “If this world were mine.” If I kind of put yourself in that framework, just if this world were yours, what would Amount B look like?
Jessie Coleman (27:29):
So I think I’m warring between what Nate said and the simplification and what you alluded to, David, and then my thoughts of just a transfer pricing economist. So if the world was mine I think I would still want it to have the construct of the arm’s length principle just because the transfer pricing economist I just can’t, there’s something in me that rebels against just throw it all away to be simple. The scope would be larger. I think the scope would be clearer as well. So a clear scope that would be larger.
(28:02):
I was thinking though, as opposed to a one size fits all, so not a return on sales of 2.5%, we think for example, pharmaceuticals, let’s have a way to get them in too. So one size fits all, 2.5 if you’re not doing regulatory functions that they say are critical, and then figure out a way to gross up that 2.5 for pharmaceutical. So to keep industries in as opposed to pushing them out. And then I also think a clear pricing.
(28:35):
We don’t have clear pricing right now. I mean, I know we did the same thing that I’m sure a lot of folks did who have access to databases. We grabbed the OECD’s consultation draft and we ran the search. I think everybody did, which by the way is super fascinating. It’s 8,000 companies that come up if you look for the distributions. And this is completely an aside, you can tell I’m such a dork that I’m even bringing this up.
David Farhat (28:59):
You’re in the right place to be a dork. Go ahead.
Jessie Coleman (29:03):
So 8,000 companies and so they’re just distributors using just the searches that they did. And because the way that countries require reporting, you see some countries like Thailand with tons and tons of companies that pop up in this 8,000 thing and then you see just a couple dozen for the US. So it’s an interesting conundrum as well when you look at the data. I don’t even know where we’re getting from for here. What would I see? I would like to see a price that’s set out there that’s workable. So going full steam there after I got on my little tantrum of how cool the data is.
David Farhat (29:43):
I like where you’re going with that. The thing I would add to what you said is kind of a rebuttable presumption. So you still give some room for both the taxpayer and the tax authority to challenge. So you give this range. It’s not a complete safe harbor to say if you’re in here, you’re out, but you say if you’re in here the burden of proof is proof on the other side to say that you should be or you shouldn’t be when it’s challenged.
(30:08):
Because I can see to your point about being a transfer pricing economist and not wanting to stray from what has been beat into us as the arm’s length standard. We crave this complexity and bespoke piece of it. I think if you leave room for it in the event that you want to make a challenge, I think that that’s great because you’re saying, well, maybe you’re not as simple as you want to be. Maybe you’ve kind of shoehorned yourself into these requirements and we don’t think you should be in there. I think that would be a good kind of compromise. I know that is sprinkling a bit more complexity into the simplicity, but it’s something.
Eman Cuyler (30:49):
Jessie, changing gears again a little bit. As a transfer pricing economist, do you think companies should be prepared to start incorporating Amount B into their transfer pricing documentation and overall compliance procedure or what are your thoughts there?
Jessie Coleman (31:04):
I think that without a number, what are you going to prepare for? I do think if I was a company and if I had just cost plus entities, we’ll say, that could arguably be treated as a return on sales, I might do the math there just to see two and a half percent what that means. I wouldn’t do much more than that at this stage. I think if I’m a company, what I would suggest, I would say take a step back. Think about if you want to be in Amount B and I’d let treasury know, I’d let the OECD know, I mean it is not too late to let them know your thoughts. And I think that’s what I would suggest not to do. The modeling is actually to think about how it can be implemented if you want to be in, that’s the question too.
Nate Carden (31:58):
Jessie, before we let you go, what is the next series of steps with respect to Amount B? What should people be looking for as we go through ‘23?
Jessie Coleman (32:08):
So as we talked about quickly is that it has been stated that a final discussion draft would be ready by the summer. Question if that’s really going to happen, but let’s take that off the table. I think that there’s a lot of work that’s ongoing right now at the OECD. A lot of stakeholders are providing input. And I mean, think treasury gave a call. Didn’t they give a call out in one of the tax news media? If you’ve got something to say it. So I think that information’s going to keep coming in. I think there’s probably going to be more modeling that’s going to be done.
(32:45):
The discussion draft mentions regressions. So to better understand how asset intensity should impact the profit level indicator, how intensity of operating assets should indicate it. So lots of modeling I think is going to be going on at the OECD level as well as I mean companies that have access to databases. They’re trying to figure out what the future holds as well. So I think we’re still in a time where people are commenting when we’re going to see a final document. I mean, my crystal ball’s been broken. So welcome maybe others here if you’ve got a better handle on the... I mean, my crystal ball’s been broken for a while, shall we say?
David Farhat (33:32):
No, I hear you, Jessie. I’m not even going to try because I’ve been wrong. I think I’m 10 for 10 being wrong now on these predictions with the OECD and US on tax. So I’ve out of the prediction business, but again, this has been a ton of fun and it’s almost sad that we have to wrap up. But any final comments before we wrap, Jessie.
Jessie Coleman (33:53):
Nothing else. Thanks for letting me join though. It’s been fun.
David Farhat (33:56):
Thanks so much for coming on. As always, it’s been GILTI Conscience. Thank you all.
Voiceover (34:02):
Thank you for joining us for today’s episode of GILTI Conscience. If you like what you’re hearing, be sure to subscribe in your favorite podcast app so you don’t miss any future conversations. Skadden’s Tax team is recognized globally for providing clients with creative and innovative solutions to their most pressing, transactional, planning and controversy challenges. Additional information about Grand Park Law Group can be found at grandparklaw.com.
Listen here or subscribe via Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts.
