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Recharge Agreement
In the context of stock compensation, this is a formal agreement between a parent corporation and its foreign subsidiary under which the subsidiary reimburses the parent for the cost of equity compensation. In many countries, if the subsidiary wants a corporate tax deduction, it must pay the equity compensation costs through a written agreement. The agreement can require tax withholding even in countries where withholding on equity compensation income is otherwise not required. For more on this topic and Section 1032 of the US tax code, see an article from KPMG.
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