To the extent that specific contributions made by participants to a CCA are different in nature, e.g. the participants perform very different types of R&D activities or one of the parties contributes property and another contributes R&D activities, the guidance in paragraph 6.64 is equally applicable. This means that the higher the development risk attached to the development activities performed by the other party and the closer the risk assumed by the first party is related to this development risk, the more the first party will need to have the capability to assess the progress of the development of the intangible and the consequences of this progress for achieving its expected benefits, and the more closely this party may need to link its actual decision-making required in relation to its continued contributions to the CCA to key operational developments that may impact the specific risks it assumes under the CCA. A development CCA in which benefits are uncertain and distant is likely to give rise to greater risks than does a services CCA in which benefits are current.
TPG2022 Chapter VIII paragraph 8.16
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By OECD
Category: OECD Transfer Pricing Guidelines (2022), TPG2022 Chapter VIII: Cost Contribution Arrangements | Tag: CCA/CSA, Control over risk, Cost Contribution Arrangement (CCA), Cost Sharing Arrangement (CSA), Decision making functions, Development risk
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