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When dealing with intercompany relationships, it's essential to recognize that these entities are separate legal entities, even if one owns the other completely. There should be an agreement outlining how payments are managed between them for legal and tax reasons. This is particularly important for multinational or non-U.S. entities being consolidated. It's crucial to have intercompany agreements with foreign entities, as one must consider not only U.S. tax laws but also the regulations of the countries in which these entities operate. Proper agreements help ensure compliance with diverse legal frameworks.
