§ 1.482-7(g)(4)(vi)(F) Discount rates –

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Category: US IRC Section 482 on Transfer Pricing, § 1.482-7 Methods to determine taxable income in connection with a cost sharing arrangement | Tag: , , , , ,
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Related Guidelines

TPG2022 Chapter VIII paragraph 8.53 Over the duration of the CCA term, the following information could be useful: a) any change to the arrangement (e.g. in terms, participants, subject activity), and the consequences of such change b) a comparison between projections used to determine the share of expected benefits from the CCA activity with the...
TPG2022 Chapter VIII paragraph 8.47 The guidance in Chapters I – III and Chapter VI is fully applicable to determining the arm’s length amount of any buy-in, buy-out or balancing payments required. There may be instances where no such payments are required under the arm’s length principle. For example, a CCA for the sharing of...
TPG2022 Chapter VIII paragraph 8.42 In services CCAs, a participant’s contribution to the CCA will often give rise to benefits in the form of cost savings (in which case there may not be any income generated directly by the CCA activity). In development CCAs, the expected benefits to participants may not accrue until some time...
TPG2022 Chapter VIII paragraph 8.37 In the case of development CCAs, variations between a participant’s proportionate share of the overall contributions and that participant’s proportionate share of the overall expected benefits may occur in a particular year. If that CCA is otherwise acceptable and carried out faithfully, having regard to the recommendations of Section E,...
TPG2022 Chapter VIII paragraph 8.31 For development CCAs, contributions in the form of controlling and managing the CCA, its activities and risks, are likely to be important functions, as described in paragraph 6.56, in relation to the development, production, or obtaining of the intangibles or tangible assets and should be valued in accordance with the...
TPG2022 Chapter VIII paragraph 8.26 In valuing contributions, distinctions should be drawn between contributions of pre-existing value and current contributions. For example, in a CCA for the development of an intangible, the contribution of patented technology by one of the participants reflects a contribution of pre-existing value which is useful towards the development of the...
TPG2022 Chapter VIII paragraph 8.21 If an arrangement covers multiple activities, it will be important to take this into account in choosing an allocation method, so that the value of contributions made by each participant is properly related to the relative benefits expected by the participants. One approach (though not the only one) is to...
TPG2022 Chapter VIII paragraph 8.10 Two types of CCAs are commonly encountered: those established for the joint development, production or the obtaining of intangibles or tangible assets (“development CCAs”); and those for obtaining services (“services CCAs”). Although each particular CCA should be considered on its own facts and circumstances, key differences between these two types...
TPG2022 Chapter VIII paragraph 8.5 A key feature of a CCA is the sharing of contributions. In accordance with the arm’s length principle, at the time of entering into a CCA, each participant’s proportionate share of the overall contributions to a CCA must be consistent with its proportionate share of the overall expected benefits to...
TPG2022 Chapter VIII Annex example 3 15. The facts are the same as Example 1, except that the per-unit value of Service 2 is 120 (that is, both Service 1 and Service 2 are equally valuable, and neither are low-value services).     16. Under the CCA, the value of Company A and Company B’s contributions...