Recently, China’s State Administration of Taxation has promulgated the Announcement on Standardizing the Administration of Cost Sharing Agreements (the “Announcement 45”) for implementation as of July 16, 2015. This announcement 45 is issued to replace the Article 69 of the implementation measures for special tax adjustments that originally addressed the administration of cost sharing agreement which now require Chinese taxpayers that enter into a cost sharing agreements (CSA) to register the agreement with the local tax authorities within 30 days of entering into the agreement. Enterprises must submit a CSA to the SAT level by level for recording within 30 days of concluding the CSA. Audit investigations and special tax adjustments will be carried out against CSAs that do not comply with the arm’s length principle, or if the CSA’s costs are not commensurate with the benefits accrued.