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In accordance with the Enterprise Income Tax Law of the People’s Republic of China and the Regulation on the Implementation, enterprises can reach the cost contribution arrangements conforming to arm’s length principle for sharing the common cost with their affiliates. The cost contribution arrangements (CCA) is reached by enterprises in order to sharing the cost and risk from research and development, production or obtaining asset, labor service and rights, meantime, CCA determines the nature and scope of each side’s interests brought by research and development, production or obtaining asset, labor service and rights. The cost contributing shall conform to cost-expected income matching principle, as well as submit the relevant materials in accordance with the tax authority requirement in the prescribed time limit.
We can trace the costs, expenses, management and control of the business between affiliated enterprises, formulate the relevant internal policies based on reasonable commerce operation structure and assist signing cost contribution arrangements.
Contents of cost contribution arrangements
Tax administration of cost contribution
The corresponding time period materials about cost contribution agreement
Unqualified cost contribution agreement shall not be paid before tax collection. Unqualified cost contribution agreement specifically means the agreement has no reasonable commercial target or economic value, doesn’t conform to arm’s length principle or cost-income matching principle, doesn’t record, prepare, preserve or submit the corresponding time period materials in accordance with regulation. Meantime, the cost contribution agreement shall not be paid before tax collection when the operation period is less than 20 years.