In summary, cost-sharing arrangements have the potential to significantly reduce a taxpayer`s tax liability. Are there situations that reduce their lust? If the returns for the development of intangible assets are uncertain – and the market value of intangible assets is lower than their development costs – the conclusion of a cost-sharing agreement is not desirable. Cost-sharing arrangements could also be unattractive if most of a company`s intangible assets are developed by a subsidiary operating in a low-tax jurisdiction. In that case, the US parent company would be required to make a payment to Sub for the parent company`s share of the cost of the intangible assets developed by Subsubtr. .