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Taxes

Corresponding adjustment

When a tax administration makes a primary adjustment in one tax jurisdiction, the tax liability of the associated enterprise may also be adjusted in a second jurisdiction. This is known as a secondary adjustment, and it ensures that the allocation of profits between the two jurisdictions remains consistent. Essentially, it is a way to prevent double taxation and promote fairness in multinational transactions. This concept is important for businesses to understand in order to properly navigate international tax regulations and avoid any potential legal issues.
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