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Wednesday, May 20, 2020 | History

2 edition of Obtain tax deferral through a Domestic International Sales Corporation, DISC found in the catalog.

Obtain tax deferral through a Domestic International Sales Corporation, DISC

United States. Industry and Trade Administration

Obtain tax deferral through a Domestic International Sales Corporation, DISC

by United States. Industry and Trade Administration

  • 250 Want to read
  • 2 Currently reading

Published by Dept. of Commerce, Industry and Trade Administration in [Washington] .
Written in English

    Subjects:
  • Domestic international sales corporations -- United States,
  • Income tax -- United States -- Foreign income

  • Edition Notes

    April 1979

    The Physical Object
    Pagination1 folded sheet (8 p.) ;
    ID Numbers
    Open LibraryOL15475153M

      • Interest charge - domestic international sales corporation • U.S. corporation that has elected, for federal income tax purposes, to be treated as an IC-DISC by filing IRS Form A (election to be treated as an interest charge DISC) • An IC-DISC is not subject to federal income tax (IRC ).File Size: 1MB.   Export profits can produce substantial tax benefits with little more than establishing a new corporation dedicated almost exclusively to export profits; a separate set of export books and records, and abiding by a relatively simple set of rules that govern Domestic International Sales Corporations (now known as “IC-DISC).

    However, one powerful tax-savings vehicle remains — the Interest Charge Domestic International Sales Corporation, or "IC-DISC". The IC-DISC has been in place since , however it was not until passage of the Jobs and Growth Tax Relief Reconciliation Act of ("JGTRRA") that its use could provide significant tax savings. company engaged in export sales, an interest charge domestic international sales corporation (IC-DISC) offers opportunities to both reduce the amount of revenue subject to the ordinary income tax rate and provide financial compensation to employees, shareholders, or other stakeholders.

    The first is the foreign sales corporation (FSC) rules, an export tax incentive which was enacted by the Deficit Reduction Act of and repealed by the FSC Repeal and Extraterritorial Income Exclusion Act of By utilizing a FSC, a U.S. exporter typically was able to obtain a tax benefit equal to a 15% exemption (or more) from federal.   The IC-DISC structure thus creates a tax arbitrage opportunity, because the commission payment from the related US exporter to the IC-DISC gives rise to a .


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Obtain tax deferral through a Domestic International Sales Corporation, DISC by United States. Industry and Trade Administration Download PDF EPUB FB2

Get this from a library. Obtain tax deferral through a domestic international sales corporation: DISC. [United States. Domestic and International Business Administration.]. Get this from a library. Obtain tax deferral through a Domestic International Sales Corporation, DISC. [United States.

Industry and Trade Administration.]. Corporations & Shareholders. Taxpayers can use an interest charge domestic international sales corporation (IC-DISC) to obtain a tax incentive available to manufacturers, producers, resellers, and exporters of goods that are produced in the United States.

Interest-Charge Domestic International Sales Corporations, After subtracting cost of goods sold and various deductions, IC-DISC’s reported $ million of taxable income, a 7-percent increase over the $ million reported for Forty-eight percent ($ million) of IC-DISC taxable income in Tax.

The Interest-Charge Domestic International Sales Corporation (IC-DISC) has survived the repeals of U.S. export incentives since and has never been targeted by the WTO.

Deriving tax benefits through an IC-DISC is slightly more complicated than the EIE because the latter simply required the completion of Form to calculate the exclusion. With the repeal of extra-territorial income exclusion (“ETI”), the Service began to see the re-emergence of the domestic international sales corporation (“DISC”) in the form of an interest charge DISC (“IC-DISC”).

The DISC provisions provide that the DISC, itself, is not. The help is in the form of a valuable export tax incentive known as a Domestic International Sales Corporation, or "DISC." The DISC is the only export tax incentive available for U.S. federal income tax purposes.

The tax advantages of a DISC mean it is beneficial primarily for small exporters. U.S. exporters—including, but not limited to, manufacturers—that create an IC-DISC (interest charge domestic international sales corporation) can enjoy potentially large tax savings with relatively low initial costs.

Congress created the IC-DISC in a manner that allows it to exist primarily on paper, and the Treasury Department further clarifies in Regs. Sec. (a) that this type of. IC-DISC is a tremendous tax break for small and medium businesses (including architects and engineers) who export products overseas.

The key is to maxmize the tax benefit and avoid getting Author: Dean Zerbe. The Interest Charge Domestic International Sales Corporation (IC-DISC) offers significant Federal income tax savings for making or distributing US products for export.

The IC-DISC was originally created by Congress to promote export sales by allowing companies. The interest charge domestic international sales corporation, or IC-DISC, provides a permanent tax benefit to entities that export products that are manufactured, grown, or extracted in the United idea is to provide an incentive for keeping production in the United States, as opposed to seeking cheaper costs outside the country.

This provision began as a domestic international. Kristi Angle, International Tax Manager, RSM US LLP @, +1 Sept. 9, Summary An interest-charge domestic international sales corporation (IC-DISC) can be a powerful tax-savings opportunity for many companies exporting products.

An IC-DISC is a domestic corporation that primarily engages in foreign sales and. The major tax benefits of the IC-DISC (Interest-Charge Domestic International Sales Corporation) tax regime to U.S. exporters are deferral of U.S.

tax on up to $10, of annual commission income and on additional export-related services. 8 The Domestic International Sales Corporation and Its Effects John Mutti and Harry Grubert Introduction and Overview Legislation which allowed U.

firms to create Domestic International Sales Corporations (DISCS) was enacted in Under its provisions the tax due on a portion of the export income attributable to a DISC could be. Taxation of an IC-DISC. An IC-DISC is categorized as a domestic C corporation that’s tax-exempt for federal income tax purposes.

However, in order to obtain tax-exempt status, the corporation must file Form A, Election to be Treated as an IC-DISC, within 90 days of its first taxable year.

A domestic international sales corporation is an entity incorporated in the United States that receives tax incentives for its export activities. In essence, the shareholders of this entity receive reduced income tax rates on the income earned from certain exports of U.S.-produced goods.

A domestic international sales corporation is also known as a foreign sales corporation. DISC stands for Domestic International Sales Corporation (also Disconnect and more) What is the abbreviation for Domestic International Sales Corporation.

FSCs replaced the Domestic International Sales Corporation (DISC). To receive FSC treatment, a special election must be filed via a Formand a special income tax return known as a FSC must be filed. Although at first blush the law seems complex for the.

Overview. The California Franchise Tax Board (FTB) recently issued Legal Ruling (LR)which addresses California tax treatment of Interest Charge Domestic International Sales Corporations (IC DISCs).

1 California does not conform to Internal Revenue Code (IRC) §§which provides for the federal taxation of IC DISCs and their shareholders. Tax Analysts provides news, analysis, and commentary on the interest charge domestic international sales corporation (IC-DISC) tax regime, formerly known as the domestic international sales corporation (DISC) tax regime.

Inthe DISC tax regime was repealed after U.S. trading partners argued that it was an illegal export subsidy in. IC-DISC • Commission DISC is a “paper” company set up by an exporter to collect commissions on export sales • Commissions are deductible to operating company and are non-taxable to DISC • Benefit of deduction at ordinary income federal tax rate • DISC pays dividend taxed to owner(s) at reduced qualified dividend federal tax rate.The Domestic International Sales Corporation (DISC) was first introduced with the Revenue Act of for providing eligible companies with export tax incentives.

Rulings from the World Trade Organization (WTO) resulted in Congress enacting changes to the Internal Revenue Code, causing the replacement of DISC with the Interest Charge Domestic.An Interest Charge Domestic International Sales Corporation (IC-DISC) is a qualifying US corporation which elects to be taxed under the special IC-DISC regime at §§ of the Code.

The United States enacted the legislation for the DISC (without the “IC”) program .