The arm’s length principle is the cornerstone of profit taxation of multinational enterprises. However, despite extensive improvements by the OECD’s BEPS Project, it has been widely criticized on two aspects: First, market jurisdictions have little access to the profits of multinational enterprises and, second, the rules governing the arm’s length principle have continuously become more complex. We suggest amending the arm’s length principle by tackling its complexity and, in addition, implementing destination rules. Reduction of functional analyses and information requirements as well as standardization of margins reduces complexity. Destination rules target the allocation of profits to market jurisdictions, which they have in common with Pillar One. However, in contrast to Pillar One, which rests on a multilateral agreement, the amended arm’s length principle is embedded in a bilateral context (usually a double tax agreement, DTA). Keeping the bilateral character significantly reduces conflicts of interest between jurisdictions, simplifies tax enforcement, and offers important benefits for dispute resolution, which is assumed to increase the perceived fairness of tax allocations. Using a stylized example, we demonstrate how the amended arm’s length principle can be applied.