Export Tax Savings Assessment
As the oldest tax benefit available to exporters, a DISC can save a company with a net export profit of $1 million about $40,000 or more in federal income tax per year.
A DISC acts as a separate, legal, tax-exempt entity from its parent company that doesn’t pay tax on commission income. Therefore, using a DISC, a U.S. company pays “commission” to the DISC based on its profits from the sale of qualifying export products (explained below). This commission is deductible by the parent company. In return, the DISC pays a dividend to its shareholders. This is a qualified dividend under Federal tax law and is taxed at up to 23.8 percent, compared to the standard 39.6% tax rate.
To qualify a company must:
- Be a U.S. manufacturing or distribution business that exports U.S.-made goods
- Be an architectural and engineering firm that oversees non-U.S. construction projects
Qualifying exports must:
- Be manufactured, produced, grown or extracted in the U.S.
- Be used or consumed outside of the U.S.
- Have no more than 50 percent of the export property value related to imported costs or components
The DISC entity or export cannot:
- Be leased or rented to a related person
- Get income from intangibles
- Be certain oil, gas, coal or uranium products
- Be unprocessed softwood timber
- Be controlled products or products in short supply
If your company and exports meet the criteria listed above and your net export profits exceed $1 million (or sometimes less if the product is highly profitable), take this assessment to see how much money you could be saving.
What you will need:
- 15 minutes to complete the assessment
- Knowledge of your company’s federal income tax rate, domestic and export sales volume and EBIT for last year and projections for the next 12 months
What you will get:
- Export Tax Savings report with estimated savings
- Consulting call with an export tax specialist to discuss your report