Transfer Pricing

Cost Sharing Arrangements

Cost Sharing Arrangements

Although cost-sharing arrangements have been used by multinational companies (MNCs) as part of tax planning strategies for years, recent regulatory developments have subjected cost-sharing arrangements to intense scrutiny. These developments include a major reformulation by the US Internal Revenue Service (IRS) of the 1995 cost-sharing regulations in January 2009; OECD ongoing revision of guidance on business restructuring; and the introduction by the German tax authorities of aggressive regulations related to valuing transfers of functions or risks in 2005. 

Under these new regulations, certain intercompany transfers of intangibles—broadly defined as transfers of any profit-driving assets and capabilities—may have to be valued under a framework where all of the benefits from the transferred intangibles, including the benefits from subsequent development of these intangibles, accrue to the original intangibles developer.

NERA's experts assist clients in addressing the new requirements of these regulatory pronouncements and in adapting the valuations applied for existing arrangements and restructuring transactions to the new valuation paradigms.

Name Title Location Phone Email
Dr. Yves Hervé Managing Director Frankfurt +49 69 710 447 508 yves.herve@nera.com
Dr. Harlow Higinbotham Managing Director Chicago +1 312 573 2803
+86 21 6103 5544
+86 10 6533 4395
harlow.higinbotham@nera.com
Dr. Emmanuel Llinares Managing Director
Head of Global Transfer Pricing
Paris
Geneva
London
+33 1 70 75 01 93
+41 22 819 94 94
+44 20 7659 8650
emmanuel.llinares@nera.com
Dr. Vladimir Starkov Director Chicago +1 312 573 2806 vladimir.starkov@nera.com
Nihan Mert-Beydilli Associate Director Los Angeles +1 213 346 3035 nihan.mert.beydilli@nera.com
Tom Braukmann Principal Frankfurt +49 69 710 447 511 tom.braukmann@nera.com
Dr. Alexander Voegele Affiliated Consultant Frankfurt +49 69 710 447 501 alexander.voegele.affiliate@nera.com
Title Type Author
NERA Experts Comment on the OECD Proposal for a “Unified Approach” under Pillar One Regulatory Filing Dr. Vladimir Starkov, Dr. Yves Hervé, Amanda Pletz, Dr. Emmanuel Llinares, Dr. Harlow Higinbotham, Pim Fris and Dr. Jacques Potin
How to Adapt to the DEMPE Concept When Using Third-Party Licensing Agreements for Tra... Published Article Dr. Yves Hervé, Philip de Homont
NERA Experts Comment on Digital Economy Discussion Paper by Australian Treasury Regulatory Filing Dr. Emmanuel Llinares, Dr. Harlow Higinbotham, Sébastien Gonnet, Dr. Vladimir Starkov
The Rising Role of Transfer Pricing in Tax Planning and Litigation Published Article Philip de Homont
Forum: Taxation of Intangible Assets Published Article Emmanual Llinares, Harlow Higinbotham, and Yves Hervé
Using statistical analysis to improve TNMM Published Article Yves Hervé and Philip de Homont
DEMPE Analysis for CUP Studies Published Article Yves Hervé and Philip de Homont
Bloomberg Tax Transfer Pricing Forum Published Article Alexander Voegele and Tom Braukman
Comments on OECD Discussion Draft on the Revised Guidance on Profit Splits Regulatory Filing Emmanuel Llinares, Harlow Higinbotham, Nihan Mert-Beydilli, and Vladimir Starkov
Recent Developments on the Profit Split Method Book Sébastien Gonnet