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When dealing with intercompany relationships, it's crucial to recognize that these are separate legal entities, even if one owns the other entirely. There should be formal agreements detailing how payments, such as loans or expenses, are handled between these entities. This is important for both legal and tax compliance. For multinational or non-U.S. entities, it's essential to establish intercompany agreements that account for both U.S. tax laws and the laws of the countries in which you're operating. Properly structured agreements help ensure compliance and avoid potential legal and tax issues across jurisdictions.
