The Prince of Wales's estate should be subject to more rigorous government scrutiny, an influential committee of MPs has said in a report.
The Public Accounts Committee said the Treasury should make independent checks on the Duchy of Cornwall's finances.
The Treasury should also ask whether the duchy should continue to be exempt from corporation tax, the MPs said.
The duchy said accounts were examined externally by a professional auditor and put before Parliament.
The Duchy of Cornwall, a major landowner in the south-west of England, is a private estate that funds both the charitable and private activities of Prince Charles, who holds the title of Duke of Cornwall.
Currently the Treasury must approve all of the duchy's land deals with a value of more than £500,000.
But the cross-party committee said details of each transaction were not published, and more transparency was required.
The Prince of Wales pays tax on his own income voluntarily but the duchy does not contribute corporation tax on its commercial activities.
Committee chairwoman, Labour MP Margaret Hodge, said this exemption may give the duchy an unfair advantage over its competitors, and added that the Treasury should examine whether it created "an unlevel playing field".
Ms Hodge said the duchy performed well in 2012-13, increasing its total income and producing an overall surplus of £19.1m.
But she was concerned that the Treasury relied on the duchy to provide it with accurate information without carrying out its own checks.
She said: "There are a number of steps that could help to bring the duchy, an historic institution, more in line with the expectations of the present day.
Ms Hodge added: "The duchy enjoys an exemption from paying tax even though it engages in a range of commercial activities.
"This tax exemption may give it an unfair advantage over its competitors who do pay corporation and capital gains tax. The Treasury should examine whether the Duchy's tax exemption creates an unlevel playing field."
The Duchy of Cornwall said it did not believe it had an unfair tax advantage over its competitors.
A spokeswoman said: "The Duke of Cornwall's income is taxed at income tax rates. The Duchy is not subject to corporation tax and the duchy is not a corporation.
"The duchy is exempt from tax on capital gains; any capital gains have to be reinvested in the business and cannot be distributed.
She added: "We are pleased to see that the committee has highlighted the duchy's success in achieving an increased revenue surplus and that it has praised the high quality of our work at Poundbury [the development of a village on the duchy's land outside Dorchester]."
The duchy said it would consider the committee's report carefully and contribute to the Treasury's response as necessary.
A Treasury spokesman said: "The Duchy of Cornwall is exempt from paying tax, like the Crown, and has been since the founding of the duchy in the 14th Century.
"Since 1993, the Prince of Wales has voluntarily paid tax on his private income, including income from the estate.
"HM Treasury's role is to ensure that the Duchy of Cornwall is managed in a sustainable way and that the strategic choices made by the estate's managers are in its long-term interests and those of current and future dukes.
"The Treasury has a constructive working relationship with the duchy and challenges decisions where appropriate."