4 Reasons for employing intracompany transaction restrictions are discussed more generally in Walter (1996).
In response to the concern, supporters of this reform have suggested various proposals to try to keep a subsidy within the bank itself.(2) Two mechanisms, in particular, have received considerable attention: the first would restrict nonbanking activities to bank holding company (BHC) subsidiaries and deny them to bank subsidiaries; the second would allow nonbank activities in bank subsidiaries but restrict intracompany transactions.(3)
But even in this case, the subsidy would be contained not by restrictions on intracompany transactions and structures but by the market power of banks.
One way of achieving this is through the allocation of revenue and expenses in intracompany transactions
. A subsidiary in a high-tax jurisdiction, therefore, may minimize the prices it charges for goods supplied or services rendered to a sister company in a lower-tax jurisdiction.
To offset decreasing demand brought on by higher input costs, suppliers tend to reduce prices when dealing with divisions that handle intracompany transactions
at a price above cost.
Inter-/Intracompany Transactions and Balances Provide a list of intercompany and intracompany transactions and balances with international offices, other church departments or church affiliates (see Appendix C for a list of church affiliates).
The list of intercompany and intracompany transactions should be summarized by entity rather than including each
* Intercompany transactions become intracompany transactions
. This means that transactions between A and B would not be subject to the U.S.