Common Contracts
1 similar Sharing Agreement contracts
COST SHARING AGREEMENT: A TUG OF WAR BETWEEN THE IRS AND MULTINATIONAL CORPORATIONSSharing Agreement • May 5th, 2019
In consideration of intangible assets’ growing importance in deriving the value for many businesses, it is important to account for these assets’ potential tax risks in order to measure their true benefits. One area of tax related to intangible assets under the scrutiny of U.S. transfer pricing and international tax rules is the cost sharing agreement. When related subsidiaries of the same international corporation enter into a cost sharing agreement, they pool their resources together to develop intangible assets for common use. During this process, there are often conflicts between multi-national companies (MNCs) and the Internal Revenue Service (IRS) in assigning the correct amount of how much subsidiaries have to pay one another. Both parties care about this because assigning costs of asset development incorrectly can lead to base erosion and profit shifting behavior for MNCs, affecting both the amount of tax revenue collected by the IRS the and bottom line of MNCs. This thesis exa
