Cost sharing arrangement (CSA)
The first China APA for cost sharing agreement (CSA-APA) focuses on global research and development (R&D) costs and confirms that the R&D costs borne by the taxpayer relating to the development of intangible assets are deductible for corporate income tax purposes and exempt from withholding tax during the eight year period covered by the CSA-APA.
Successfully concluding an APA for a complex issue like CSAs substantially reduces the taxpayer’s transfer pricing risk and future compliance and dispute costs. It also enhances the taxpayer’s confidence to increase investments in developing intangible assets in China and exploit those intangibles in the China market.
How have we helped?
- Assisted with the first China CSA-APA case.
- Assisting clients with feasibility and transfer pricing analyses on CSA design and implementation.
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