| Intercompany Transactions
Intercompany transaction prices are typically determined by analyzing the price and/or markup for similar transactions between two unrelated parties. The result of this transfer pricing analysis is range of prices, within which the company must choose a specific price or markup. One of the most common tasks for tax professionals is performing "what-if" analyses around modeling intercompany transaction prices within the targeted range. However, using today's spreadsheet solutions, tax professionals must often resort to a "best guess," often resulting in a higher tax liability than is necessary.
With Liquid Engines, companies can now quickly and accurately pinpoint the best transaction pricing models. The STx transfer pricing functionality allows companies to easily determine whether changing the transfer price will increase or decrease their tax liability. Hundreds of individual transactions can be simultaneously adjusted by changing a single field in the scenario. The calculation logic automatically and reliably accounts for the differences in taxable income and eliminations. With STx, tax professionals can accurately forecast the tax liability of all intercompany transactions, including:
STx provides customers with fast and accurate modeling of intercompany transactions, supply-chain transactions, and derived value transactions (such as a royalty transaction derived from an entity's revenue). In addition, STx automatically accounts for expense disallowance (anti-PIC legislation) and group eliminations. STx customers can quickly model CUP, Cost +, Resale -, and CPM intercompany transactions, and can analyze the affect across a range of financial forecasts.
STx enables customers to quickly measure the impact of various rates and to leverage technology to find the optimal transfer price across thousands of individual transactions.
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