Each controlled participant must provide to the Commissioner, within 30 days of a request, the items described in this paragraph (k)(2) and paragraph (k)(3) of this section. The time for compliance described in this paragraph (k)(2)(iii)(B) may be extended at the discretion of the Commissioner ...

See § 1.6662-6(d)(2)(iii)(D) regarding coordination of the rules of this paragraph (k) with the documentation requirements for purposes of the accuracy-related penalty under section 6662(e) and (h) ...

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The controlled participants to a CSA must timely update and maintain documentation sufficient to – (A) Describe the current scope of the IDA and identify – (1) Any additions or subtractions from the list of reasonably anticipated cost shared intangibles reported pursuant to paragraph (k)(1)(ii)(B) of this section; (2) Any cost shared intangible, together with each controlled participant’s interest therein; and (3) Any further development of intangibles already developed under the CSA or of specified applications of such intangible which has been removed from the IDA (see paragraphs (d)(1)(ii) and (j)(1)(i) of this section for the definitions of reasonably anticipated cost shared intangible and cost shared intangible) and the steps (including any accounting classifications and allocations) taken to implement such removal; (B) Establish that each controlled participant reasonably anticipates that it will derive benefits from exploiting cost shared intangibles; (C) Describe the functions and risks that each controlled participant has undertaken during the term of the CSA; (D) Provide an overview of each controlled participant’s business segments, including an analysis of the economic and legal factors that affect CST and PCT pricing; (E) Establish the amount of each controlled participant’s IDCs for each taxable year under the CSA, including all IDCs attributable to stock-based compensation, as described in paragraph (d)(3) of this section (including the method of measurement and timing used in determining such IDCs, and the data, as of the date of grant, used to identify stock-based compensation with the IDA); (F) Describe the method used to estimate each controlled participant’s RAB share for each year during the course of the CSA, including – (1) All projections used to estimate benefits; (2) All updates of the RAB shares in accordance with paragraph (e)(1) of this section; and (3) An explanation of why that method was selected and why the method provides the most reliable measure for estimating RAB shares; (G) Describe all platform contributions; (H) Designate the type of transaction involved for each PCT or group of PCTs; (I) Specify, within the time period provided in paragraph (h)(2)(iii) of this section, the form of payment due under each PCT or group of PCTs, including information and explanation that reasonably supports an analysis of applicable provisions of paragraph (h) of this section; (J) Describe and explain the method selected to determine the arm’s length payment due under each PCT, including – (1) An explanation of why the method selected constitutes the best method, as described in § 1.482-1(c)(2), for measuring an arm’s length result; (2) The economic analyses, data, and projections relied upon in developing and selecting the best method, including the source of the data and projections used; (3) Each alternative method that was considered, and the reason or reasons that the alternative method was not selected; (4) Any data that the controlled participant obtains, after the CSA takes effect, that would help determine if the controlled participant’s method selected has been applied in a reasonable manner; (5) The discount rate or rates, where applicable, used for purposes of evaluating PCT Payments, including information and explanation that reasonably supports an analysis of applicable provisions of paragraph (g)(2)(v) of this section; (6) The estimated arm’s length values of any platform contributions as of the dates of the relevant PCTs, in accordance with paragraph (g)(2)(ii) of this section; (7) A discussion, where applicable, of why transactions were or were not aggregated under the principles of paragraph (g)(2)(iv) of this section; (8) The method payment form and any conversion made from the method payment form to the specified payment form, as described in paragraph (h)(3) of this section; and (9) If applicable under paragraph (i)(6)(iv) of this section, the WACC of the parent of the controlled group that includes the controlled participants ...

The controlled participants must timely update and maintain sufficient documentation to establish that the participants have met the CSA contractual requirements of paragraph (k)(1) of this section and the additional CSA documentation requirements of this paragraph (k)(2) ...

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Over the duration of the CCA term, the following information could be useful: a) any change to the arrangement (e.g. in terms, participants, subject activity), and the consequences of such change b) a comparison between projections used to determine the share of expected benefits from the CCA activity with the actual share of benefits (however, regard should be had to paragraph 3.74) c) the annual expenditure incurred in conducting the CCA activity, the form and value of each participant’s contributions made during the CCA’s term, and a detailed description of how the value of contributions is determined ...

The following information would be relevant and useful concerning the initial terms of the CCA: a) a list of participants b) a list of any other associated enterprises that will be involved with the CCA activity or that are expected to exploit or use the results of the subject activity c) the scope of the activities and specific projects covered by the CCA, and how the CCA activities are managed and controlled d) the duration of the arrangement e) the manner in which participants’ proportionate shares of expected benefits are measured, and any projections used in this determination f) the manner in which any future benefits (such as intangibles) are expected to be exploited g) the form and value of each participant’s initial contributions, and a detailed description of how the value of initial and ongoing contributions is determined (including any budgeted vs actual adjustments) and how accounting principles are applied consistently to all participants in determining expenditures and the value of contributions h) the anticipated allocation of responsibilities and tasks, and the mechanisms for managing and controlling those responsibilities and tasks, in particular, those relating to the development, enhancement, maintenance, protection or exploitation of intangibles or tangible assets used in the CCA activity i) the procedures for and consequences of a participant entering or withdrawing from the CCA and the termination of the CCA j) any provisions for balancing payments or for adjusting the terms of the arrangement to reflect changes in economic circumstances ...

The transfer pricing documentation standard set out in Chapter V requires reporting under the master file of important service arrangements and important agreements related to intangibles, including CCAs. The local file requires transactional information including a description of the transactions, the amounts of payments and receipts, identification of the associated enterprises involved, copies of material intercompany agreements, and pricing information including a description of reasons for concluding that the transactions were priced on an arm’s length basis. It would be expected that in order to comply with these documentation requirements, the participants in a CCA will prepare or obtain materials about the nature of the subject activity, the terms of the arrangement, and its consistency with the arm’s length principle. Implicit in this is that each participant should have full access to the details of the activities to be conducted under the CCA, the identity and location of the other parties involved in the CCA, the projections on which the contributions are to be made and expected benefits determined, and budgeted and actual expenditures for the CCA activity, at a level of detail commensurate with the complexity and importance of the CCA to the taxpayer. All this information could be relevant and useful to tax administrations in the context of a CCA and, if not included in the master file or local file, taxpayers should be prepared to provide it upon request. The information relevant to any particular CCA will depend on the facts and circumstances. It should be emphasised that the information described in this list is neither a minimum compliance standard nor an exhaustive list of the information that a tax administration may be entitled to request ...

Over the duration of the CCA term, the following information could be useful: a) any change to the arrangement (e.g. in terms, participants, subject activity), and the consequences of such change b) a comparison between projections used to determine the share of expected benefits from the CCA activity with the actual share of benefits (however, regard should be had to paragraph 3.74) c) the annual expenditure incurred in conducting the CCA activity, the form and value of each participant’s contributions made during the CCA’s term, and a detailed description of how the value of contributions is determined ...

The following information would be relevant and useful concerning the initial terms of the CCA: a) a list of participants b) a list of any other associated enterprises that will be involved with the CCA activity or that are expected to exploit or use the results of the subject activity c) the scope of the activities and specific projects covered by the CCA, and how the CCA activities are managed and controlled d) the duration of the arrangement e) the manner in which participants’ proportionate shares of expected benefits are measured, and any projections used in this determination f) the manner in which any future benefits (such as intangibles) are expected to be exploited g) the form and value of each participant’s initial contributions, and a detailed description of how the value of initial and ongoing contributions is determined (including any budgeted vs actual adjustments) and how accounting principles are applied consistently to all participants in determining expenditures and the value of contributions h) the anticipated allocation of responsibilities and tasks, and the mechanisms for managing and controlling those responsibilities and tasks, in particular, those relating to the development, enhancement, maintenance, protection or exploitation of intangibles or tangible assets used in the CCA activity i) the procedures for and consequences of a participant entering or withdrawing from the CCA and the termination of the CCA j) any provisions for balancing payments or for adjusting the terms of the arrangement to reflect changes in economic circumstances ...

The transfer pricing documentation standard set out in Chapter V requires reporting under the master file of important service arrangements and important agreements related to intangibles, including CCAs. The local file requires transactional information including a description of the transactions, the amounts of payments and receipts, identification of the associated enterprises involved, copies of material intercompany agreements, and pricing information including a description of reasons for concluding that the transactions were priced on an arm’s length basis. It would be expected that in order to comply with these documentation requirements, the participants in a CCA will prepare or obtain materials about the nature of the subject activity, the terms of the arrangement, and its consistency with the arm’s length principle. Implicit in this is that each participant should have full access to the details of the activities to be conducted under the CCA, the identity and location of the other parties involved in the CCA, the projections on which the contributions are to be made and expected benefits determined, and budgeted and actual expenditures for the CCA activity, at a level of detail commensurate with the complexity and importance of the CCA to the taxpayer. All this information could be relevant and useful to tax administrations in the context of a CCA and, if not included in the master file or local file, taxpayers should be prepared to provide it upon request. The information relevant to any particular CCA will depend on the facts and circumstances. It should be emphasised that the information described in this list is neither a minimum compliance standard nor an exhaustive list of the information that a tax administration may be entitled to request ...

“Over the duration of the CCA term, the following information could be useful: a) Any change to the arrangement (e.g. in terms, participants, subject activity), and the consequences of such change; b) A comparison between projections used to determine expected benefits from the CCA activity with the actual results (however, regard should be had to paragraph 3.74); and c) The annual expenditure incurred in conducting the CCA activity, the form and value of each participant’s contributions made during the CCA’s term, and a detailed description of how the value of contributions is determined and how accounting principles are applied consistently to all participants in determining expenditures and the value of contributions.” ...

“The following information would be relevant and useful concerning the initial terms of the CCA: a) A list of participants; b) A list of any other associated enterprises that will be involved with the CCA activity or that are expected to exploit or use the results of the subject activity; c) The scope of the activities and specific projects covered by the CCA; d) The duration of the arrangement; e) The manner in which participants’ proportionate shares of expected benefits are measured, and any projections used in this determination; f) The form and value of each participant’s initial contributions, and a detailed description of how the value of initial and ongoing contributions is determined and how accounting principles are applied consistently to all participants in determining expenditures and the value of contributions; g) The anticipated allocation of responsibilities and tasks associated with the CCA activity between participants and other enterprises; h) The procedures for and consequences of a participant entering or withdrawing from the CCA and the termination of the CCA; and i) Any provisions for balancing payments or for adjusting the terms of the arrangement to reflect changes in economic circumstances.” ...

As indicated in Chapter V on Documentation, it would be expected that application of prudent business management principles would lead the participants to a CCA to prepare or to obtain materials about the nature of the subject activity, the terms of the arrangement, and its consistency with the arm’s length principle. Implicit in this is that each participant should have full access to the details of the activities to be conducted under the CCA, projections on which the contributions are to be made and expected benefits determined, and budgeted and actual expenditures for the CCA activity. All this information could be relevant and useful to tax administrations in the context of a CCA and taxpayers should be prepared to provide it upon request. The information relevant to any particular CCA will depend on the facts and circumstances. It should be emphasised that the information described in this list is neither a minimum compliance standard nor an exhaustive list of the information that a tax administration may be entitled to request ...

“A CCA should be structured in a manner that conforms to the arm’s length principle. A CCA at arm’s length normally would meet the following conditions: a) The participants would include only enterprises expected to derive mutual benefits from the CCA activity itself, either directly or indirectly (and not just from performing part or all of that activity). See paragraph 8.10; b) The arrangement would specify the nature and extent of each participant’s beneficial interest in the results of the CCA activity; c) No payment other than the CCA contributions, appropriate balancing payments and buy-in payments would be made for the beneficial interest in property, services, or rights obtained through the CCA; d) The proportionate shares of contributions would be determined in a proper manner using an allocation method reflecting the sharing of expected benefits from the arrangement; e) The arrangement would allow for balancing payments or for the allocation of contributions to be changed prospectively after a reasonable period of time to reflect changes in proportionate shares of expected benefits among the participants; and f) Adjustments would be made as necessary (including the possibility of buy-in and buy-out payments) upon the entrance or withdrawal of a participant and upon termination of the CCA.” ...