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When dealing with intercompany relationships, it's essential to recognize that these are separate legal entities, even if one fully owns the other. An agreement regarding financial transactions between these entities is crucial for various reasons, including legal and tax considerations. This is particularly important for multinational or non-U.S. entities in consolidation. It is necessary to have comprehensive intercompany agreements that account for both U.S. tax laws and the laws of the foreign entities involved to ensure compliance and mitigate potential issues.
