Can you benefit by utilizing an IC-DISC?

print March , 2015

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
    – LLCs
    – Partnerships

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.

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