A corporation's legal entity structure and the prices of transactions between the different entities can have a dramatic impact on the overall tax liability. Imagine having the power to consider hundreds or thousands of transactions between various entities to determine an optimal transfer-pricing model. Or imagine having the power to—in a matter of minutes—measure the tax impact of an unlimited number of legal entity combinations while taking into account all material data, business constraints, state tax rules, and filing options. Depending on the number of legal entities considered, this analysis would likely involve evaluating thousands of combinations—in fact, the number of permutations grows exponentially, and quickly reaches a level that is unfathomable. This level of modeling is simply impossible when armed only with traditional tools such as spreadsheets. Without Liquid Engines' advanced technology, a tax department is unable to truly identify the optimal tax profile.

Now Liquid Engines Optimizers make it a reality.

Liquid Engines’ unparalleled optimization technology merges tax intelligence with advanced mathematics, enabling tax professionals to do what was previously impossible—efficiently evaluate thousands of possible combinations with unprecedented thoroughness and accuracy. Combining sophisticated mathematical and economic algorithms with tax rules and corporate data from the repository, the optimizers quickly calculate the tax impact of the potential alternatives and present back to the user the best options.

Offering a wizard-driven interface, the State Tax Optimizers are easy to use and enable users to apply constraints reflecting current business facts to ensure that the optimizers identify only the options that can be implemented. With this level of insight and control, it is finally possible to identify a tax profile that minimizes tax impact and adheres to business constraints to reduce tax risk. STx includes the following breakthrough optimizers:

• Entity Structure Optimizers—Evaluate merging or splitting legal entities to minimize the corporation’s overall tax liability.
• Apportionment Method Optimizer—Considers the rules governing apportionment to determine the best method of apportionment.
• Transfer Pricing Optimizer—Identifies the set of transfer prices that minimizes tax liability.
• Operations Placement Optimizer—Determines, from a tax perspective, the best location and legal entity structure for a new operation, such as a factory, a distribution center, or a warehouse.

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