Tax Allocation
/ˈtæks ˌæləˈkeɪʃən/
Definitions
- (n.) The process or method by which tax liabilities or benefits are distributed among different parties or jurisdictions.
The tax allocation agreement determines how the multinational corporation divides its tax obligations among subsidiaries.
- (n.) In partnership or corporate law, the distribution of tax attributes such as credits, deductions, and income among partners or shareholders.
The partnership’s tax allocation clause allocated losses to partners with the highest income to maximize tax benefits.
Related terms
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Commentary
Tax allocation provisions require precision to reflect the intended division of tax burdens and benefits, particularly in contracts and international tax contexts.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.