Cost Sharing Arrangements

Cost sharing arrangements involve the sharing of research and development costs between two or more related parties. Such structures can offer multinational corporations the opportunity to place ownership of intellectual property in low-tax jurisdictions. If set up properly, cost sharing arrangements can be an excellent tool for the deployment of research and development activities.

However, cost sharing arrangements are facing high levels of scrutiny from tax authorities all over the world. If set up inappropriately, cost sharing arrangements can leave your firm with great risk and potentially large unknown future costs.

Our professionals have participated in the creation and adjustment of numerous cost sharing arrangements. We have the technical skills necessary to assist you with calculating an appropriate buy-in payment, establishing an arm's-length royalty payment and assigning arm's-length returns for routine activities contributed by cost sharing participants.

If we are involved in the creation or adjustment of a cost sharing structure, we will prepare the appropriate documentation to support it. Regardless of whether you are considering establishing a cost sharing structure for the first time, or simply need to update an existing structure, Altus Economics can help you.