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When dealing with intercompany relationships, it's crucial to establish agreements between separate legal entities, regardless of full ownership. These agreements outline how payments will be repaid and serve multiple purposes, including legal and tax considerations. This is particularly important for multinational or non-U.S. entities that are consolidated. It's essential to have operating or intercompany agreements with entities outside the United States, as you must comply with both U.S. tax laws and the laws of the countries in which the entities operate. These agreements help ensure lawful and efficient financial transactions between the entities.
