Export Tax Incentives
Reduce overall tax liability and improve cash flow with export tax incentives.
The Interest Charge-Domestic International Sales Corporation (IC-DISC) export tax incentive is available to manufacturing and distribution companies with foreign sales. The IC-DISC allows certain U.S. businesses to reduce their overall tax liability and improve cash flow through a commission mechanism by reducing the effective tax rate on export sales. The IC-DISC may be used by S corporations, Partnerships, and C corporations.
Foreign-Derived Intangible Income (FDII) is another export tax incentive available to C corporations. FDII is income derived by a US corporation from export sales or services. As part of the 2017 Tax Cuts and Jobs Act, Congress reduced the tax rate on foreign-derived sales and service income to 13.125%, aiming to encourage US corporation to export more goods and services, and locate more intangible assets in the U.S. C Corporations with foreign sales are eligible to benefit from FDII in addition to IC-DISCs.
Eide Bailly has been serving the manufacturing industry for 90 years and has experience with over 800 manufacturing clients across a variety of sectors. Our experienced international tax professionals work side by side with clients to determine if their company qualifies for export tax incentives. We will perform the required calculations while meeting compliance requirements.
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