Tax control across borders: Can you prove your transfer pricing is fair - without handing over your playbook?

The core problem: tax compliance demands exposure

Today’s global compliance model relies on over-disclosure. In order to justify transfer pricing between subsidiaries, companies routinely hand over detailed spreadsheets, cost structures, internal benchmarks, and intercompany agreements. This is especially common under OECD’s BEPS framework, where tax authorities want to see how and where profits are generated.  

This approach is high-risk. It creates security concerns, increases the likelihood of internal data inconsistencies, and slows down tax teams with never-ending documentation requests. It also opens companies up to challenge if different jurisdictions interpret inputs differently.

In a 2023 Deloitte survey, 72% of multinational tax leaders said they expect increased scrutiny of cross-border transfer pricing over the next three years. Meanwhile, the EU’s implementation of DAC7 and the global Pillar 2 minimum tax regime means that regulators are accelerating expectations for data transparency and real-time access to logic - not just outcomes.

So how do you show your work without giving away your working papers or playbook?

A better way: confidential, verifiable tax computation

Let’s take the example of a company with operations in Germany, Singapore, and the United States. Each subsidiary has its own cost base, pricing assumptions, and operational data. Traditionally, you'd compile a documentation file that tries to justify the profit allocation across these entities.

With Partisia’s solution, each subsidiary privately inputs its data into a secure Multi-Party Computation (MPC) environment. The system computes the required tax outcomes - adjusted profits, royalty distributions, or intercompany service costs - without revealing raw data to any other party. Only the result is visible. A blockchain ledger records a cryptographic proof that the computation occurred, along with a timestamp, creating a verifiable audit trail.

Tax authorities don’t get access to the sensitive data itself - but they do get assurance that the logic was followed consistently, and that the result can’t be tampered with.

This flips the model. Instead of showing all your inputs to justify an output, you only show the output and can prove how it was calculated - without exposing the inputs.

 

Why this matters now

For the industry, this represents a technological advancement and a deliberate, necessary response to the evolving demands of global tax compliance.

With the OECD’s Pillar 2 requiring detailed global minimum tax calculations across jurisdictions, companies are now expected to process more complex rules and provide more transparency under tighter deadlines. At the same time, regulators are becoming less tolerant of vague explanations or undocumented logic.

According to EY’s 2023 Global Tax Risk Survey, 58% of companies experienced disputes or audits related to transfer pricing in the last two years. Many of these disputes arose not from fraud or manipulation, but from documentation gaps or inconsistent interpretation of inputs.

Manual workflows, siloed data, and ad hoc spreadsheet files are not sustainable in this environment.

The ROI of adopting this model

Companies that adopt privacy-preserving, verifiable tax computation models stand to benefit in several ways: Common results:

• 30% reduction in audit prep workload

• 50% faster documentation cycles

• Full traceability without raw data exposure

They reduce audit exposure. By creating a standardized, verifiable process, they minimize the risk of disputes and penalties from inconsistent reporting or disclosure gaps.

They reduce compliance costs. Automating the computation and record-keeping of tax logic removes the need for endless documentation cycles and cuts down on the internal hours spent explaining pricing decisions.

They improve data security.Sensitive financial logic, cost models, and internal business strategies stay protected - reducing risk from leaks, legal requests, or internal misuse.

They build trust.Tax authorities are more likely to work collaboratively with firms that show evidence of integrity, precision, and proactive compliance.

A mid-sized multinational using this system across 3 to 5 jurisdictions could reduce audit-related workload by up to 30%, cut documentation prep time in half, and eliminate the need for multiple rounds of disclosure revisions during tax review. That translates to real savings on internal labor, legal advisory fees, and reputational risk.

 

Partisia solves this

The Partisia platform combines secure Multi-Party Computation with blockchain-based audit trails, purpose-built for regulated environments like international tax compliance.

Each participant inputs their data into an encrypted computation process - no one else sees it, and even Partisia can’t access it. The output is a result both sides can trust - and a record that no one can tamper with.

It’s not just tech. It’s compliance peace of mind in a world where both data exposure and regulatory scrutiny are growing fast.

• Data never leaves your infrastructure

• Built for integration with SAP, Oracle, and other tax engines

• Used in regulated industries

• Backed by 15+ years of cryptography research

 

Want to see how this works in your tax structure?

We’re partnering with global firms to run pilot programs across Europe, Asia, and North America. If you manage cross-border taxes and are looking for a way to modernize compliance without increasing risk, we’d be glad to talk.