Yesterday accountants Grant Thornton unveiled a blockchain solution inter.x to help enterprises to manage transactions between companies in the same group. It addresses two common pain points relating to transfer pricing and treasury management.
When a company sells goods or services to another within the same group but a different country, invariably the countries will have different tax rates. By manipulating the pricing of intercompany transactions, a group could position more of its profits in a lower tax rate jurisdiction.
In the past, this transfer pricing, or mispricing, was common practice until governments outlawed it by requiring the sales to use market prices. But there is still ample scope for manipulation because the market price may not be obvious for many transactions.
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