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When dealing with intercompany relationships, it's crucial to establish agreements between separate legal entities, even if one fully owns the other. These agreements are essential for various reasons, including legal and tax considerations. It's particularly important to have clear intercompany agreements when consolidating multinational or non-U.S. entities. This ensures compliance not only with U.S. tax laws but also with the laws of the foreign countries where these entities operate. Therefore, careful planning and documentation are necessary to effectively manage financial transactions and obligations between the companies involved.
