Cost Contribution Arrangements

A Cost Contribution Arrangement (CCA) is a framework agreed upon among business enterprises to share the costs and risks of developing, producing, or obtaining assets, services, or rights, and to determine the nature and extent of the interests of each participant in those assets, services, or rights.

New tax law stipulates CCA clauses, that is, the cost incurred by the enterprises and its affiliated party, receiving intangible assets, or jointly providing and accepting labor services, shall be contributed on the basis of Arm’s Length Principle when calculating taxable income.

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