Can you benefit by utilizing an IC-DISC?
Companies with profitable export sales may realize permanent tax savings by utilizing an Interest-Charge Domestic International Sales Corporation (IC-DISC).
- For more than 40 years the IC-DISC incentive has provided tax savings to U.S. exporters.
- If you qualify, Smith & Howard might be able to help you realize a tax savings of up to 19.6 percent by setting up an IC-DISC.
- All entity types can utilize a DISC including:
- C corporations
- S corporations
What is an IC-DISC?
- A domestic corporation that has elected to be an IC-DISC.
- At least 95 percent of its annual gross recipients are qualified export recipients.
- At year-end, the adjusted basis of its qualified export assets is at least 95 percent of the adjusted basis of all of its assets.
- It has only one class of stock with a minimum par/stated value of $2,500.
- The entity maintains separate books and records for the tax year.
- Its tax year conforms with that of its principle shareholder(s).
If you have export sales, Smith & Howard can consult with you to identify potential tax benefits of setting up an IC-DISC. Call us at 404-874-6244 or complete the contact form below.
Example of IC-DISC Tax Benefits
This article originally appeared in BDO USA LLP's "International Tax Practice" brochure. Copyright (c) 2015 BDO USA, LLP. All rights reserved.