Cost of goods transacted between related entities has become a flashpoint for MNCs. With about 60% of world trade occurring within related networks, invoice pricing is no longer just an accounting entry but a synchronised strategy to avoid multimillion-dollar regulatory mismatches with I-T and customs.
MNCs face an inherent conflict between two regulators with opposing objectives. A high import price potentially shifts profits out of the importing country, reducing I-T liability. But it triggers anti-overpricing alarms for I-T authorities. Simultaneously, the same high price inflates assessable value at the border, increasing customs duty outflow.
