Did you know that according to the National Association of Manufacturers (NAM), exports account for over 12 million American jobs?

For U.S. exporters, understanding IC-DISC FAQs is essential to unlocking significant tax savings while maintaining a competitive edge in global markets.

However, navigating the complexities of export tax incentives can be challenging, especially when it comes to understanding the Interest Charge Domestic International Sales Corporation (IC-DISC). This export tax incentive enables companies to take advantage of reduced income taxes on international sales, boosting profits through deferred and lower tax rates.

To help you grasp the essentials, we’ve compiled a list of the 18 most frequently asked questions about IC-DISC. From its workings to its benefits and requirements, we’ve got you covered.

From its structure to tax benefits and setup requirements, these FAQs are key for exporters looking to optimize their tax strategies.

Read on to delve into the details and discover if an IC-DISC is right for your business.

1. What is an IC-DISC?

An Interest Charge Domestic International Sales Corporation (IC-DISC) is a tax-advantaged structure established specifically to boost U.S. exports.

Created by U.S. tax legislation, it enables businesses to defer federal income tax on qualified export profits. This is achieved through deductible commissions paid to the IC-DISC, which in turn distributes these profits to shareholders as qualified dividends taxed at reduced rates.

This essentially transforms ordinary income into tax-deferred qualified dividends, allowing shareholders to benefit from the capital gains rate upon distribution.

Check our complete guide to learn more!

2. How Does an IC-DISC Work?

An IC-DISC functions as a separate entity that earns a commission on export sales.

This structure allows companies to pay a separate set of books for their IC-DISC and operating business, ensuring clear accounting and compliance with tax regulations.

The operating company deducts this commission from its taxable income and then pays it to the IC-DISC. The IC-DISC distributes these commissions to shareholders as dividends, resulting in significant tax savings.

Here’s a breakdown of how an IC-DISC works:

1. Setting Up the Structure: An IC-DISC is established as a separate corporation from the main operating company.
2. Export Sales: When the operating company makes a qualified export sale, it sells the goods to the IC-DISC at an arm’s length price (fair market value).
3. Commission Payment: The operating company then pays a commission to the IC-DISC on the export sale. This commission amount is predetermined and reflects the export profit margin.
4. Tax Deferral: The operating company can deduct this commission expense from its taxable income, effectively deferring taxes on the export profit.
5. Distribution to Shareholders: The IC-DISC accumulates these commissions but only pays a minimal annual interest charge to the IRS. Shareholders receive dividends taxed at lower rates (currently capped at 20%), benefiting from significant tax savings.

3. What Are IC-DISC Tax Benefits?

IC-DISCs offer a compelling combination of tax benefits, including deferred taxes on qualified export income, conversion of income to lower-taxed dividends, and overall export tax savings.

• Enhanced Cash Flow: By deferring tax payments, IC-DISCs can significantly improve a company’s cash flow.This frees up capital, allowing the business to reinvest in export growth, expand operations, or strengthen financial stability.
• Income Conversion: By channeling a portion of export income through an IC-DISC, businesses can convert it from ordinary income taxed at a maximum federal rate of 37% to qualified dividends. These dividends are taxed at a significantly lower capital gains rate, currently capped at 20%. This translates to substantial tax savings.
• Tax Deferral: The IC-DISC structure allows exporters to defer federal income tax on qualified export profits. The operating company pays the commission to the IC-DISC as a business expense, reducing its taxable income. This essentially defers tax payments on those earnings until the IC-DISC distributes them as dividends to shareholders.

4. What Are IC-DISC Requirements?

To qualify as an IC-DISC, a corporation must meet specific requirements:

• Domestic Corporation: The corporation must be established in the United States.
• Single Stock Class: It can only have one class of outstanding stock with a minimum par or stated value of $2,500.
• Export-Focused Business: At least 95% of its gross receipts must come from qualified export sales. These sales involve physical goods produced or manufactured in the U.S. with no more than 50% foreign content.
• Export-Oriented Assets: A minimum of 95% of the corporation’s assets (excluding certain liquid assets) must be related to its export activities. This includes inventory of export property, receivables from export sales, and marketing intangibles used to generate export revenue.

5. How to Calculate IC-DISC Commission Income?

Determining the IC-DISC Commission is a strategic choice by the exporter.

The commission amount is established as the greater of two options:

1. 4% of Gross Receipts from Qualified Exports: This method is straightforward and applies a fixed percentage to the total value of qualifying export sales. It can be beneficial for companies with a consistently high profit margin on exports.
2. 50% of the Combined Taxable Income Attributable to Export Sales: This option delves deeper into the profitability of exports. It takes half of the taxable income generated from those sales, offering a potentially larger commission if the export profit margin is significant.

Consulting with tax advisors is recommended to ensure optimal commission calculations and maximize tax savings.

Choosing the Right Method:

The most advantageous method depends on your specific business situation. Here’s a general guideline:

6. If your export sales have a consistently high profit margin, the 4% of gross receipts method might be simpler and sufficient.
7. If your export profit margins are variable, the 50% of combined taxable income method could yield a larger tax benefit in years with higher profitability.

Consulting a Tax Advisor:

Given the potential complexities, consulting with a qualified tax advisor is recommended. They can provide invaluable guidance specifically tailored to your business situation.

If you are ready to leverage IC-DISCs for substantial tax savings, contact our Export Tax Management team today to discuss your eligibility and maximize your benefits!

We can help you navigate the complexities of IC-DISCs and ensure you’re taking full advantage of this valuable tax incentive, providing invaluable guidance specifically tailored to your business situation.

Here’s how we can assist you:

• Assess your export sales data: we’ll analyze your export sales data to determine which IC-DISC commission method (4% of gross receipts or 50% of combined taxable income) would maximize your tax benefits.
• Calculate the commission under both methods: we’ll perform the calculations for both methods to ensure you have a clear understanding of the potential tax savings for each option.
• Recommend the optimal approach: Based on our analysis, we’ll recommend the most strategic IC-DISC commission method to maximize your tax savings while complying with IC-DISC regulations.

8. How are IC-DISC Dividends Taxed Compared to Regular Dividends?

One of the significant advantages of IC-DISCs lies in their taxation of dividends.

Unlike regular dividends, which are taxed as ordinary income at rates that can go up to 37%, IC-DISC dividends are classified as qualified dividends.

This distinction translates to a much lower tax burden for shareholders.

Currently, qualified dividends are taxed at a maximum rate of 20%, offering substantial tax savings.

This preferential tax treatment can significantly boost your bottom line.

9. How to Set Up an IC-DISC?

While establishing an IC-DISC offers significant tax benefits, the process itself can involve several steps. Here’s a basic overview:

1. Form a Corporation: The first step is to form a new corporation under your chosen state’s business laws. This entity will function separately from your main operating company.
2. Elect IC-DISC Status: Once the corporation is established, you’ll need to file Form 4876-A, Election To Be Treated as an Interest Charge DISC, with the IRS. This formally elects your new corporation as an IC-DISC.
3. Maintain Compliance: IC-DISCs have specific ongoing requirements to maintain their status. These include adhering to ownership structures, sales activity levels, and asset allocation regulations set by the IRS.

10. Are there IC-DISC Limitations?

While IC-DISCs offer attractive tax advantages, it’s essential to be aware of certain limitations and ongoing requirements.

Here’s a closer look:

• Ongoing Reporting: Regular reporting obligations come with IC-DISC status. These involve filing specific IRS forms to document your export activities and commission calculations.
• Compliance Risks: Failure to adhere to the IRS’s requirements regarding recordkeeping, reporting, and operational rules can lead to penalties and potentially the disqualification of your IC-DISC, jeopardizing its tax benefits.
• Strict Recordkeeping: IC-DISCs must maintain separate and detailed accounting records to document their qualified export sales, expenses, commissions, and assets. This ensures transparency and facilitates tax compliance.

Mitigating Challenges:

Proper planning and organization are crucial for managing these limitations effectively.

Consulting with a tax advisor experienced in IC-DISCs like Export Tax Management can help you establish efficient recordkeeping systems, navigate the reporting process, and ensure ongoing compliance with IRS regulations.

11. Is an IC-DISC Right for My Business?

The decision to establish an IC-DISC hinges on your company’s specific circumstances. Here are some key factors to consider:

• Export Volume: IC-DISCs are most advantageous for businesses with a substantial and consistent level of qualified export sales. The tax benefits become more significant as the volume of exports increases.
• Profitability of Exports: The profitability of your export sales also plays a role. If your export profit margins are high, the potential tax savings from an IC-DISC can be even greater.
• Administrative Considerations: Setting up and maintaining an IC-DISC involves additional administrative requirements, such as separate accounting records and IRS filings. Consider your company’s capacity to handle these ongoing tasks.

Making an Informed Decision:

If your business generates significant export sales with healthy profit margins and has the resources to manage the administrative aspects, an IC-DISC could be a strategic tax-saving tool.

Consulting with a qualified tax advisor can provide valuable guidance tailored to your specific situation.

Here’s where our Export Tax Management team can be a valuable asset.

Our team of qualified tax advisors possesses in-depth knowledge of IC-DISCs and can provide tailored guidance throughout the entire process.

We can assist you with:

• Eligibility Assessment: We’ll analyze your business activities and export sales to determine if you qualify for an IC-DISC.
• Potential Tax Savings Calculation: We’ll project the potential tax savings an IC-DISC could generate based on your specific financial data.
• Strategic Decision-Making: We’ll work with you to weigh the benefits and potential challenges of establishing an IC-DISC, ensuring it aligns with your overall business goals.

Contact our Export Tax Management team today for a free consultation.

We’ll help you make an informed decision about whether an IC-DISC is the right strategic move for your business to maximize your export tax savings.

12. IC-DISC vs. FSC (Foreign Sales Corporation)

The IC-DISC (Interest Charge Domestic International Sales Corporation) program emerged as a successor to the Foreign Sales Corporation (FSC) regime.

The FSC system was phased out in 2000 due to international trade disputes.

Here’s a key difference that makes IC-DISCs more attractive for U.S. exporters:

• Domestic vs. Foreign Structure: FSCs required establishing a separate corporation in a foreign country. IC-DISCs, on the other hand, are domestic corporations formed within the U.S., eliminating the complexities of foreign incorporation and management.
• Focus on Tax Deferral: Both programs offered tax benefits, but IC-DISCs specifically focus on tax deferral of export profits. This allows businesses to delay paying taxes on a portion of their income, improving cash flow.

Benefits of IC-DISCs:

By simplifying the corporate structure and emphasizing tax deferral, IC-DISCs offer a more accessible and potentially cash-flow-positive solution for U.S. exporters compared to the FSC model.

13. IC-DISC Compliance Requirements

Compliance is crucial for maintaining IC-DISC status.

This includes adhering to strict documentation, maintaining separate accounting records, and filing annual IRS Form 1120-IC-DISC.

Non-compliance can lead to significant penalties.

Here are the key aspects to remember:

• Annual Filing of IRS Form 1120-IC-DISC: This form is your annual report to the IRS, detailing your IC-DISC’s income, expenses, and commission calculations. Timely filing ensures you remain in good standing.
• Separate Accounting Records: IC-DISCs must maintain separate accounting books from your main operating company. This segregation enables clear tracking of qualified export sales, expenses, commissions, and assets.
• Strict Documentation: Meticulous record keeping is crucial. You’ll need to maintain detailed documentation for all your export transactions, including invoices, shipping documents, and proof of foreign receipt of goods. This ensures transparency and facilitates audits.

Consequences of Non-Compliance:

Failing to adhere to these requirements can have serious repercussions.

Potential penalties include fines, tax reassessments, and even the disqualification of your IC-DISC, jeopardizing its valuable tax advantages.

Maintaining Compliance:

For many businesses, navigating these complexities can be challenging. Consider consulting with a tax advisor experienced in IC-DISCs. At Export Tax Management, we guide you through the recordkeeping process, set up your accounting systems correctly, and assist you with filing the annual IRS form.

14. Is IC-DISC Worth it for small exporters?

While IC-DISCs offer potential tax benefits for small exporters with significant export sales, you need to consider them carefully.

The tax savings can translate into valuable capital to fuel growth, but you must factor in the administrative costs associated with setting up and maintaining an IC-DISC to determine if the overall impact is positive.

• Benefits:

• Deferral of federal income tax on a portion of export profits
  • Increased cash flow through tax savings
  • Potential for tax-exempt earnings in the IC-DISC (with limitations)

However, remember to weigh these benefits against the administrative costs involved.

15. Are IC-DISC costs worth the tax break?

Before incurring the costs of setting up and maintaining an IC-DISC, it’s crucial to weigh them against the potential tax savings to determine if the overall benefit justifies the investment.

Factors to consider include the volume of your exports, the tax rate differential between ordinary income and qualified dividends, and the complexity of your business structure.

Consulting with a tax advisor can help you determine if an IC-DISC is the right strategy for your company.

16. IC-DISC recordkeeping requirements

IC-DISC entities must maintain meticulous records to substantiate their tax benefits. This includes detailed documentation of export sales, commission calculations, and adherence to qualification requirements. Proper record keeping is essential for audit purposes.

17. What Are The Benefits of Using an IC-DISC?

The primary benefits include significant tax savings, better cash flow, and deferred income taxes, all of which make the IC-DISC an attractive option for U.S. exporters.

By deferring taxes and taking advantage of lower dividend tax rates, companies can reinvest capital in their business to drive growth.

Tax Savings Through Deferral and Rate Arbitrage:

• Tax Deferral: An IC-DISC allows you to defer federal income tax on a portion of your export profits. The IC-DISC itself isn’t taxed on the income it receives from your company as a commission on exports. You only pay taxes when you distribute those profits as dividends to shareholders. This can be a significant benefit, especially for companies with high export volumes.
  
  
• Rate Arbitrage: Dividends paid from an IC-DISC are often taxed at a lower rate than ordinary income from corporate profits. This is because they qualify for the preferential tax treatment of qualified dividends. The current tax rate for qualified dividends is lower than the highest marginal income tax rate for corporations. This difference allows you to keep more of your export profits.

Improved Cash Flow:

By deferring taxes on your export income, an IC-DISC can significantly improve your company’s cash flow.

This frees up capital that can be used for other business needs, such as investment in research and development, marketing, or expanding export operations.

Strategic Reinvestment:

The tax-deferred nature of an IC-DISC allows you to reinvest profits back into your business without the immediate tax burden.

This can be crucial for growing companies that need capital to expand their export capabilities and become more competitive in the global marketplace.

Overall, an IC-DISC can be a powerful tool for U.S. exporters by offering tax advantages, improving cash flow, and facilitating strategic reinvestment for long-term growth.

18. Are There Disadvantages of using an IC-DISC?

Potential disadvantages include the complexity of setup and ongoing compliance, associated costs, and the necessity for diligent recordkeeping. Businesses must ensure they can meet the administrative demands to fully benefit from an IC-DISC.

Some drawbacks to consider.

• Administrative Burden: Setting up and maintaining an IC-DISC involves significant administrative complexity. Companies must meet strict qualification requirements, including maintaining a separate set of books and records, filing specific tax forms, and complying with ongoing regulations. This can be a significant burden for small or under-resourced businesses.
• Professional Fees: The legal and accounting expertise needed to establish and manage an IC-DISC can be expensive. Companies will incur costs for setting up the corporation, filing annual tax returns, and ensuring compliance with complex regulations.
• Potential for Disqualification: Failing to meet the strict requirements can lead to disqualification from the program, resulting in the loss of tax benefits and potential tax penalties. This underscores the importance of careful planning and ongoing compliance efforts.
• Limited Applicability: Not all export businesses qualify for an IC-DISC. Companies with a low volume of exports or those that don’t meet the “qualified export receipt” criteria may not benefit significantly from this program.

By carefully weighing the potential drawbacks against the tax advantages, companies can determine if an IC-DISC is the right strategic choice for their export operations.

19. What Are Common IC-DISC Mistakes to Avoid?

Using an IC-DISC effectively requires meticulous recordkeeping and adherence to specific regulations.

Here are some critical mistakes to avoid:

• Skimping on Documentation: Maintain comprehensive documentation to support all transactions with your IC-DISC. This includes export contracts, invoices, and proof of export. Incomplete records can trigger IRS scrutiny and potentially disqualify you from the program.
• Commission Calculation Errors: Miscalculating your IC-DISC commission can have significant tax implications. Ensure you understand the formula and apply it accurately to avoid underpaying or overpaying taxes.
• Entangled Accounts: Failing to maintain separate accounting for your IC-DISC can lead to disqualification. This includes separate bank accounts, books, and payroll records.
• Going Solo: IC-DISC regulations can be complex. Don’t hesitate to seek professional guidance from tax advisors experienced in IC-DISCs. They can help you navigate the setup process, ensure compliance, and maximize your tax benefits.

By avoiding these pitfalls, you can ensure your IC-DISC operates smoothly and delivers the intended tax advantages for your export business.

Get a free consultation with our tax advisors to learn how an IC-DISC can simplify your exports and maximize your profits.

Don’t miss out, schedule yours today!

20. What are IC-DISC Tax Audit Considerations?

Be prepared for scrutiny.

The IRS closely examines IC-DISCs during audits to ensure they meet qualification requirements and comply with regulations. Here’s how to be prepared:

• Documentation is King: Gather comprehensive documentation to support your IC-DISC’s existence and activities. This includes formation documents, export contracts, invoices, proof of export, commission calculations, and separate accounting records.
• Proactive Recordkeeping: Maintain a well-organized system for all IC-DISC related documents. Easy access to accurate records streamlines the audit process and demonstrates your commitment to compliance.
• Know Your Limits: Don’t be afraid to seek professional help from tax advisors with IC-DISC expertise. They can guide you through potential audit issues and represent you before the IRS if necessary.

By being proactive with documentation and potentially securing professional support, you can increase your chances of a smooth IC-DISC audit and minimize the risk of losing valuable tax benefits.

To Sum Up: What benefits can Export Tax Management provide?

By addressing these 18 FAQs, we’ve aimed to clarify the essentials of IC-DISC.

Yes, the IC-DISC offers significant tax advantages for U.S. exporters, but it requires careful setup and ongoing compliance.

We know that tax reduction is one of the most essential reasons corporations begin exploring IC-DISC, but there are several other benefits of which to be aware of:

1. With an IC-DISC you are able to reduce the cost of your capital by supplying ongoing financing.
2. Income can be moved to the IC-DISC as tax free money and then distributed to the shareholders. If distributed this way, IC-DISC allows for buyouts and creates tax advantages for industries like vehicles and estate planning.
3. IC-DISC ensures your C corporation does not get double taxed.
4. IC-DISC assists with the management of employee incentives for shareholders.

If you want to take your international business to the next level, IC-DISC is the answer. Check out our related articles:

• Difference between IC-DISC and FDII
• Export Tax Incentives in the United States
• What is the Future of IC-DISC?

Export Tax Management offers expertise in navigating the complexities of IC-DISC.

From initial setup and compliance to ongoing management, we provide tailored solutions to maximize your tax savings and ensure seamless operation.

Schedule a free consultation and unlock your export tax savings now.

Tax incentives for exporters allow United States-based corporations exporting to foreign countries to increase their savings and lower their tax liability. The goal of these incentives is to maximize foreign exports. What are tax incentives to exporters, and how do they work?

The primary US-based tax incentives for exporters are the Interest Charge Domestic International Sales Corporation (IC-DISC) and Foreign Derived Intangible Income (FDII). An IC-DISC is a separately formed business entity that makes a commission on certain export sales. The federal tax rates are lower when those payments are distributed as qualified dividends.

This guide to export incentives will explain your options in more detail, the expected tax benefits and other advantages, and how to begin reaping tax savings.

Overview of Tax Incentives for Exporters in the USA

According to the International Trade Administration, the US already exports $2 trillion in services and goods worldwide but can always afford to expand.

That’s why Congress created the IC-DISC in 1971. That’s not the only tax incentive for US corporations with foreign presences; FDII is another popular option.

Export Tax Management Inc. specializes in IC-DISC incorporation, compliance, and implementation. Explore your tax incentive options with our services.

The Types of Tax Incentives for Exporters in the USA

Here’s an overview of the tax incentives exporters can take advantage of:

Tax Credits

Tax credits allow taxpayers to deduct a specific amount by the dollar from their federal income taxes. Businesses pay less money on their taxes as a result. Tax credits can be partially refundable, fully refundable, or nonrefundable.

A refundable or partially refundable tax credit generates a refund according to the prescribed amount. States and the federal government will make tax credits available to qualifying businesses.

Tax Deductions

Another type of tax incentive exporters should consider is a tax deduction. Businesses can subtract a sum from their taxable income, paying less on their taxes. Types of deductions include itemized or standard deductions.

You subtract the amount due by taxable income, and thanks to The Tax Cuts and Jobs Act, the amount of standard deductions is higher than ever

Some deductions small businesses and startups are eligible to claim on their tax returns are as follows:

• Startup expenses
• Vehicle costs
• Property, sales, and local taxes
• Maintenance and repairs
• Pass-through tax deductions
• Loan interest
• Regulatory and licensing fees
• Professional and legal fees
• Insurance
• Equipment
• Bad debts
• Marketing and advertising
• Business travel

Tax Exemptions

Exporters should also consider their tax exemption eligibility. A tax exemption reduces the corporation’s tax obligation. Municipal, county, and state governments offer exemptions.

IC-DISCs and other tax-exempt organizations can also reduce their federal income tax rate.

Tax incentives share many similarities in how they reduce a corporation’s taxes owed. However, the different ways incentives lower taxes and the eligibility criteria make it worth a corporation’s time to thoroughly explore deductions versus credits versus exemptions, especially as they apply to IC-DISC and FDII.

Learn more about the differences between these two tax incentives for exporters in our article.

Want to explore how tax exemptions and incentives like IC-DISC can benefit your business?

At Export Tax Management Advisory Firm, we specialize in IC-DISC and can help you navigate exemptions, deductions, and credits to maximize your tax savings and boost your bottom line. Reach out to us for a consultation today!

Why the IC-DISC Is the Best Choice as a Tax Incentive

IC-DISC stands head and shoulders over FDII and other tax incentives for exporters eager to claim more tax savings. An IC-DISC is a Congress-issued tax incentive and tax code that broadens the scope of US sales in foreign countries and opens the door to exporting.

Eligible companies must establish an IC-DISC separate from their main entity, with it operating as a tax-exempt entity without office space or employees. The exporter or shareholders must form the IC-DISC, with a required delineation between it and C corporations.

When the corporation makes an international sale, it owes the IC-DISC a commission. The commission is deductible as a business expense. No federal income taxes are owed until the IC-DISC begins paying owner dividends.

The dividends have a tax rate of only 23.8 percent.

When should a corporation consider applying for IC-DISC status? Seek this tax benefit if a high tax rate has impeded business growth. Export Tax Management Inc. can help you determine the right road to tax savings and incentives for your business.

Contact us today to determine if IC-DISC status is right for you.

IC-DISC Tax Returns: Credits and Deductions

According to Schedules C and E of IRS Tax Form 1120, qualifying corporations can make the following deductions:

• Freight insurance and freight
• Contributions
• Interest
• Licenses and taxes
• Bad debts
• Employee benefit programs
• Profit-sharing plans and pensions
• Maintenance and repairs
• Officer compensation
• Warehousing
• Sales commissions
• Rent
• Wages and salaries
• Advertising and market studies
• Nonqualified inclusions and dividends
• Qualified dividends
• Total inclusions and dividends
• IC-DISC dividends (including former DISCs)
• Global Intangible Low-Taxed Income or GILTI
• Inclusions from controlled foreign corporation sales, in which a lower-tier foreign corporation’s stock was sold
• Dividends from foreign sources where the foreign corporation owns at least 10 percent but is not a hybrid corporation
• Dividends from wholly-owned foreign subsidiaries
• Dividends from foreign corporations with less than, equal to, or more than 20 percent owned
• Dividends on certain preferred stocks from public utilities that are less than or more than 20 percent owned
• Dividends from foreign or domestic corporation debt-financed stock
• Dividends from foreign corporations that are less than or more than 20 percent owned outside of debt-financed stock

Maximizing your IC-DISC is simple with the right support, such as from Export Tax Management Inc. For example, a bakery that produces goods in the US but sells them internationally would qualify for IC-DISC status, lessening its tax burden.

Advantages of Joining the IC-DISC Tax Incentives for Exporters

Establishing an IC-DISC allows corporations to begin reaping the following advantages.

Delaying Taxes by Waiting to Pay Dividends on the Commission

While corporations under DISC status must still file taxes within nine months from the end of their tax year and by no later than the 15th day (unless that day falls on a weekend or holiday), when the corporation has to pay taxes under this tax incentive isn’t always the same.

A corporation can wait until it generates $10 million of export sales before paying the commission as a dividend. This limit resets every year.

Spending Less Money on Taxes

Corporations don’t want to spend more than necessary on their taxes, as the loss in capital can trickle down to other parts of the company. A bad tax year might cause a corporation to tighten its belt, reduce staff, or make other changes to stay in the green.

Tax incentives for exporters can reduce their federal income tax spending, preventing the above cost-cutting measures from transpiring. IC-DISC corporations can deduct up to 50 percent of export income.

Increasing a Corporation’s Income

A corporation will have more income after delaying dividends on commissions and reducing federal income tax spending. This wealth can be used to reduce costs, expand (such as hiring more staff or opening more offices and warehouses), and research and develop new products and services.

Expanding Business Internationally

The additional income and ability to continue expanding its roster of goods and services will allow DISC-qualifying corporations to expand business internationally, increasing export revenue.

Exporting goods from the United States to other parts of the world gives businesses a competitive advantage, reduces risk (other economies might fluctuate less than their home economy), and increases access to tax incentives.

Is your corporation eager to explore tax incentives and ways to lower federal income tax? Reach out to Export Tax Management Inc. today and explore our services.

Requirements to Enjoy the IC-DISC Tax Incentives for Exporters

Corporations applying for tax-exempt status must understand the eligibility requirements for export tax incentives.

Here are the eligibility criteria an IC-DISC must meet:

• Up to 95 percent of its gross receipts must be qualified gross receipts.
• It must pass an export assets and gross receipts test.
• It must have only one stock class valued at $2,500 or higher.
• It must have separate records from other business entities.
• When adjusted, its qualified export assets must be worth 95 percent (or more) of its asset sums.

Qualifying corporations must document all income and spending, including dividends, deductions, special deductions, inclusions, and gross income, even if the corporation doesn’t pay taxes thanks to its tax-exempt status.

The corporation must also file taxes by the required deadline. Avoid common mistakes, such as failing to meet IC-DISC status yet filing as one anyway, skipping or leaving off important parts of Tax Form 1120, and failing to check your math before filing.

FAQs About Tax Incentives for Exporters

I. What is the incentive to export?

Exporting allows businesses to reduce their tax liability through specialized tax incentives. Programs like the IC-DISC encourage U.S. businesses to sell products and services abroad by offering substantial federal income tax savings, thus enhancing profitability and global competitiveness.

II. What is the US export tax incentive?

The U.S. export tax incentive primarily refers to the IC-DISC (Interest Charge Domestic International Sales Corporation). This program allows qualified exporters to lower their taxable income by deferring taxes and converting ordinary income into capital gains, which are taxed at a lower rate, offering significant tax savings.

III. Who qualifies for IC-DISC tax incentives?

To qualify for IC-DISC tax incentives, businesses must be U.S. entities that export products, including manufactured goods, agricultural products, software, or architectural and engineering services related to export projects. Both corporations and pass-through entities, such as partnerships and S-corporations, are eligible.

IV. What is Foreign-Derived Intangible Income (FDII), and how does it benefit exporters?

FDII is income from exporting intangible assets, such as patents, trademarks, or intellectual property. Exporters benefit from FDII through a reduced tax rate, effectively encouraging innovation and U.S.-based companies to sell their intangible assets in foreign markets while lowering their overall tax burden.

V. Can service companies qualify for export tax incentives?

Yes, certain service companies can qualify for export tax incentives, particularly if their services are related to foreign projects. Engineering, architectural, and software development firms that deliver services abroad can benefit from IC-DISC tax advantages, provided they meet the necessary qualifications.

Do you have more questions?

If you’re interested in learning more about tax incentives for exporters, Export Tax Management is ready to assist. For further information, explore our IC-DISC FAQs or contact us to schedule a consultation and discover how IC-DISC can boost your export tax savings strategy.

Book a Consultation Now to Maximize Your Tax Incentives

Tax incentives for exporters, like FDII and IC-DISC, offer powerful opportunities for businesses to reduce their tax burden and boost profitability. These incentives reward your efforts and position your company for global expansion. 

Take the next step toward accelerating your growth by contacting Export Tax Management today!

In July 2024, U.S. exports of goods and services reached a record high of $265.9 billion, according to the U.S. Census Bureau. This growth offers U.S. exporters a tremendous opportunity, and one way to capitalize on it is through the IC-DISC structure, which helps businesses boost profitability by cutting down on taxes.

So, how does IC-DISC accounting work, and what do businesses need to know to take full advantage of it?
Essentially, IC-DISC allows exporters to create a separate, tax-exempt entity where export-related income is shifted as commissions. This income is taxed at a lower dividend rate than the higher ordinary income tax rate, leading to significant tax savings.

By mastering IC-DISC accounting, companies can achieve substantial tax reductions and take full advantage of this powerful incentive for exporters.

Read on to discover how this tax strategy can benefit your business and enhance your overall profitability.

What Is IC-DISC Accounting?

IC-DISC refers to the financial management and tax reporting practices associated with an Interest Charge-Domestic International Sales Corporation (IC-DISC), a tax-exempt entity encouraging U.S. exports. 

By setting up an IC-DISC, qualifying businesses can shift income from export sales into the IC-DISC, effectively reducing the overall tax rate on these profits.

The key benefit of IC-DISC is that it enables companies to transform ordinary income from exports, often taxed at rates as high as 37%, into dividend income taxed at much lower capital gains rates (currently 20%). This results in substantial tax savings for the shareholders of the IC-DISC and the exporting company.

In essence, this structure is a strategy for businesses to manage their tax liability more effectively while expanding their reach in global markets.

Understanding IC-DISC

To fully benefit from IC-DISC, grasp its core components. Properly managing qualified export assets and structuring stock classes are key to maximizing tax savings and ensuring compliance. These elements form the foundation of successful IC-DISC practices and can significantly impact the company’s and shareholders’ tax obligations.

The Role of Qualified Export Assets

To qualify for IC-DISC benefits, a company must hold qualified export assets. These assets are directly tied to export activities, such as goods or services sold for use outside the U.S. Examples include products manufactured in the U.S. for export, raw materials used in their production, and specific services related to export operations. Properly managing these assets is crucial for claiming IC-DISC benefits.

Maintaining accurate books and records for these qualified export assets is essential. This includes tracking qualified export receipts and the proceeds generated from export sales. Proper documentation ensures the company can claim all eligible tax benefits while complying with IC-DISC regulations.

Class of Stock in IC-DISC

IC-DISCs can issue different classes of stock, which may affect tax planning for shareholders. When distributed, the profits from IC-DISC are classified as IC-DISC qualified dividends, allowing shareholders to benefit from the lower tax rates on dividends rather than ordinary income rates. This tax treatment makes careful stock classification an essential component of maximizing the benefits of IC-DISC for shareholders.

Key Components of IC-DISC Accounting

IC-DISC involves key elements that help businesses optimize tax savings on export income. These include managing commission payments, accurate record-keeping, and compliance with IRS regulations. Together, these components ensure the proper functioning of the IC-DISC and allow companies to benefit from lower tax rates.

Export Sales and Commission Income

One of the critical mechanisms of IC-DISC is the ability of an exporting company to pay a commission to the IC-DISC on its export sales. The commission typically represents a percentage of the company’s export sales. The exporting company shifts this income to the IC-DISC, which either remains tax-exempt or gets taxed at a lower dividend rate when distributed to shareholders. By utilizing this structure, companies reduce their overall tax liability on export income, making it a key benefit of IC-DISC accounting.

This strategy can lower the company’s combined taxable income and IC-DISC, resulting in significant tax savings. By paying commissions to the IC-DISC, companies shift taxable income to a lower bracket, easing their overall tax burden.

Maintaining Accurate Books and Records

IC-DISC accounting requires meticulous attention to detail in maintaining accurate books and records. Internal and export sales must be accounted for correctly, and all qualified export receipts must be properly documented to ensure the IC-DISC’s tax-exempt status. Failure to maintain accurate records can lead to compliance issues, penalties, or the loss of IC-DISC tax benefits.

Businesses must also ensure that they accurately track the ultimate use of exported goods, confirming that these products or services are indeed destined for use outside the U.S. This step is critical for maintaining the IC-DISC’s tax-exempt status on the income generated from export activities.

At Export Tax Management, we specialize in guiding businesses through the benefits of IC-DISC. Our experts are here to ensure you maximize your tax savings while staying fully compliant. Learn more about how we can help your business thrive—explore our services today.

Tax Benefits and Strategies for Exporting Companies

IC-DISC provides exporters with various tax-saving strategies, from converting income into lower-taxed dividends to combining benefits with FDII. Below, we explore how these strategies work, their potential impact, and the compliance steps necessary to maintain these tax advantages.

Tax Savings with IC-DISC

The primary goal of an IC-DISC is to create tax savings for exporting companies and their shareholders. The commission income paid to the IC-DISC benefits from favorable tax treatment, enabling exporters to significantly reduce their overall tax liabilities.

One of the most significant benefits of an IC-DISC is its ability to convert ordinary income into dividend income. Since shareholders pay taxes on dividend income at the lower capital gains rate rather than the higher ordinary income rate, they can achieve substantial tax savings on their share of IC-DISC profits. This tax structure allows shareholders to keep more of their earnings, making IC-DISC a highly beneficial tool for reducing tax burdens on export-related income.

Integration with Foreign Derived Intangible Income (FDII)

An IC-DISC can also be integrated with other tax strategies, such as Foreign Derived Intangible Income (FDII). FDII is another incentive designed to encourage exports by providing lower tax rates on foreign-derived income from intangible assets.

Combining IC-DISC with FDII allows exporting companies to reduce their tax liability further. FDII benefits companies by lowering the tax rate on specific foreign income. Meanwhile, IC-DISC allows for the deferral and reduction of taxes on export commissions, making these two strategies highly complementary.

Tax Exemptions and Compliance

Maintaining tax-exempt status for an IC-DISC is essential. To do this, companies must meet stringent compliance requirements, such as maintaining accurate records of all qualified export transactions and ensuring that all relevant documentation is readily available for review.

Regular audits and updates to records help businesses stay in line with federal regulations, avoiding penalties that could negate the tax benefits of the IC-DISC structure.

Practical Considerations for Exporting Companies

Setting up and maintaining an IC-DISC requires careful planning, accurate record-keeping, and compliance with IRS rules. Below, we cover the steps for establishing an IC-DISC and address common challenges businesses face in staying compliant and maximizing tax savings.

Setting Up and Maintaining an IC-DISC

Establishing an IC-DISC involves several steps, including creating a separate corporate entity and ensuring that at least 95% of the IC-DISC’s gross receipts come from qualified export receipts. Additionally, ongoing responsibilities include detailed accounting, record-keeping, and annual reporting to the IRS.

Once the IC-DISC is set up, businesses must maintain accurate financial records and ensure compliance with tax laws. Accurately allocating commission income, classifying stock, and documenting export transactions are crucial for maximizing the tax savings associated with an IC-DISC.

Common Challenges and Solutions

One of the most common challenges with IC-DISC is maintaining accurate records to prove that exported goods or services are used outside the U.S. Additionally, correctly calculating commission income and ensuring it aligns with the IRS’s guidelines can be complex. Companies often discover that partnering with an experienced tax professional makes it easier to navigate IC-DISC challenges. This partnership also helps ensure full compliance while maximizing potential tax savings.

FAQs about IC-DISC Accounting

I. What are the key benefits of implementing an IC-DISC for my exporting business?

An IC-DISC offers significant tax savings by allowing businesses to shift export income into a tax-exempt entity. This reduces the overall tax liability by taxing profits at the lower dividend rate instead of the higher ordinary income rates. Additionally, it enables businesses to reinvest tax savings into growth and expansion, enhancing competitiveness in global markets.

II. How does an IC-DISC impact export sales and commission income calculation and reporting?

This structure allows exporting companies to pay a commission based on export sales, shifting taxable income from the company to the IC-DISC entity. This income is either tax-exempt or taxed at lower dividend rates. By accurately reporting these commissions, companies can reduce their taxable income and increase tax-efficient income for shareholders.

III. What qualifies as a “qualified export receipt” in IC-DISC?

A “qualified export receipt” refers to revenue generated from selling goods or services intended for use or consumption outside the United States. This includes products manufactured in the U.S. intended for export. To qualify, the goods must meet specific IRS criteria, ensuring that the income qualifies for IC-DISC tax benefits.

IV. How does IC-DISC interact with other tax strategies, such as FDII?

An IC-DISC can be combined with Foreign Derived Intangible Income (FDII) strategies to reduce tax liabilities further. FDII incentivizes exports by lowering the tax rate on certain foreign-derived income. FDII and IC-DISC allow businesses to maximize domestic and international tax savings when used together. This combination provides a comprehensive strategy for reducing overall tax liabilities.

V. What are the essential records and documentation required to maintain compliance with IC-DISC regulations?

To comply with IC-DISC regulations, businesses must maintain detailed records of export transactions. This includes documentation such as qualified export receipts, commission payments, and stock classifications. Businesses must maintain accurate books and records to prove tax-exempt status and report all income correctly. Regular audits and proper documentation help avoid penalties and maintain compliance with IRS standards.

Do you have more questions?

If you’re looking to learn more about IC-DISC accounting or determine if it’s the right fit for your business, Export Tax Management is here to assist. Our experts provide personalized advice and comprehensive support throughout the IC-DISC process. For additional insights, explore our IC-DISC FAQs, or contact us today to schedule a consultation and see how IC-DISC can optimize your export tax strategy.

Partner with Us for Expert IC-DISC Accounting Solutions

An IC-DISC offers a powerful way for U.S. exporters to lower their federal tax liabilities and increase profits. By correctly setting up and managing this tax structure, businesses can move export income to lower tax brackets and remain competitive globally. Success depends on accurate accounting and staying compliant with tax regulations.

Looking to get started? Partner with Export Tax Management, and our experts will guide you through every step of the IC-DISC process.
Contact us today and let us help you maximize your tax savings and take full advantage of this valuable opportunity.

IC-DISC export tax incentives can lessen tax liability via a commission mechanism, so eligible businesses heavily seek them. However, companies must understand the full extent of these tax benefits before applying. What are the IC-DISC export tax incentives, and how do they work?

IC-DISC export tax incentives are offered for businesses with a foreign sales presence but still based in the United States. Eligible businesses can tax some of their exported profits at a lower rate, known as a commission mechanism. Tax deferment is also available, allowing companies to improve their cash flow.

This guide to IC-DISC tax benefits will explain the incentive in full, its advantages, reporting and compliance requirements, and more.

A Brief Definition of IC-DISC (Interest Charge-Domestic International Sales Corporation)

An Interest Charge-Domestic International Sales Corporation (IC-DISC) is not taxed on its income. Instead, its shareholders are taxed on the commission when the income is distributed. Shareholders also face an interest charge on deferred tax liability.

IC-DISCs act as a sales commission agent for export businesses, specializing in international sales. The tax code provision for IC-DISC incentivizes US-based businesses to use a commission mechanism to lower their tax liability.

DISC benefits were limited in 1984 when Congress adjusted its statutes. DISC tax incentives and deferrals were available only by paying an interest charge first. Also important was the reduction in benefits. Businesses had to make another DISC election, as the legislation terminated those that existed at the time.

This lowered the rate of DISC tax returns drastically from 1984 until 2006. In the 2020s, DISC tax returns are healthier than ever, beginning with an uptick in 2007 onward.

IC-DISC Qualifying Criteria

IC-DISCs must meet this criterion to qualify:

• A corporation must have made at least $2 million in foreign profit before considering this tax incentive.
• The tax year of the IC-DISC is the same for the principal shareholder having the greatest voting power by percentage. The IC-DISC should be elected for a tax year for either principal shareholder if the two have the same rate of voting power.
• An IC-DISC must have separate records and books from another corporation under the same owners.
• Its outstanding stock must be $2,500 or higher every day of the last tax year. New IC-DISCs must have that revenue from the day the IC-DISC status was elected and for subsequent days.
• It must only specialize in one stock class.
• The adjusted rate of qualified export assets must be at least 95 percent when adjusting all IC-DISC assets
• The IC-DISC must make its election 90 days before the taxable year begins.
• Export assets must be receivables or commission revenues.
• Up to 50% of the IC-DISC’s gross receipts should be commissions-based from their qualifying exports, which are exports manufactured in the US at a rate of 50 percent or higher.
• They must lease property made in the US for countries outside of it.

How Does the IC-DISC Export Tax Incentive Work?

Let’s venture further into IC-DISC export tax incentives. Under the commission mechanism, you would create a corporation that meets the classifications of an IC-DISC structure. The shareholders or exporter must own the corporation, with the owner determined by the exporter type.

For instance, an exporter who’s a flow-through entity can create an IC-DISC as a subsidiary. However, if they’re a C-corporation, the onus is on the shareholders to establish the IC-DISC structure. Common ownership between the IC-DISC and the shareholder’s company is critical.

The IC-DISC receives a commission payment, which varies depending on the rate of export gross receipts. The only export gross receipts eligible are those where at least 50 percent of the product’s value is manufactured in America.

The commission payment lowers the IC-DISC’s taxable income, which means receiving tax breaks. Further, the IC-DISC does not have to pay federal income tax on the commission payments.

Instead, the IC-DISC pays a tax-deductible commission, or qualified dividend, to the shareholders.

For example, a manufacturer receives a corporate tax rate of 35 percent, but through IC-DISC tax incentives, the shareholder pays their qualified dividend income at 20 percent. This leads to tax savings of 15 percent.

Export Tax Management Inc. specializes in IC-DISC incorporation, implementation, and compliance. Contact our experts today to explore your future as an IC-DISC.

Advantages of IC-DISC for Exporters

Why do exporters seek IC-DISC tax incentives? Here is an overview of the benefits.

Promotes Competitiveness

Exporters seeking tax benefits through IC-DISC incentives are better positioned to be competitive. They can expand their stage to the world economy, increasing their rate of export income and strengthening their company as they broaden their approach.

Tax Savings

Tax incentives for exporters like IC-DISC can lead to substantial tax savings, the biggest perk. IC-DISCs are tax-exempt and don’t pay federal income taxes on commissions. Instead, the IC-DISC pays dividends to its shareholders, which are typically taxed at the lower qualified dividend tax rate, providing an opportunity for significant tax savings.

The rate paid on the taxable dividends doesn’t exceed 23.8 percent, which accounts for a net investment income tax rate of 3.8 percent and a capital gains tax rate of 20 percent.

In the 2020s, the marginal individual income tax rate is around 37 percent. However, an IC-DISC export tax incentive can drop to 29.6 percent, especially with a qualified business income deduction.

This allows flow-through entities using this tax incentive to lower tax rates to under 23.8 percent.

Export Financing

The money an IC-DISC saves through deferring and reducing its tax amounts and the increased cash flow from received commissions enables it to use the money however it chooses. For example, the IC-DISC can take out a larger loan or use the funds to pay directly for expanding its business.

In the latter case, an export business can fund itself. There’s no need to go through the stressful loan application process, pay back a bank, or accrue interest.

Expanded Export Services

An IC-DISC can also use its increased cash flow to broaden its services. Perhaps the company introduces a new product or service or funnels the money into an advertising or marketing campaign to grow its business. The possibilities are endless, but all positive.

IC-DISC Deferments

The freedom to retain a commission and defer taxes allows an IC-DISC to hold onto export sales of more than $10 million annually before paying the interest payments. The above paragraphs illustrate that the taxes cannot be indefinitely deferred, but the corporation’s funding is widely beneficial.

Export Tax Management Inc. has completed more than 3,000 IC-DISCs and has accrued many happy clients. Join our 50+ CPA firm partners by contacting our experts about your IC-DISC export tax incentive today.

IC-DISC Compliance and Reporting Requirements

The benefits of an IC-DISC are only available to businesses that comply with the rules. First, we’ll provide an overview of those rules, then explain the reporting protocols.

IC-DISC Compliance Requirements

You’ll recall that an IC-DISC must keep its financial records separate from other corporate entities, such as a secondary business, but the compliance requirements run deeper than that.

An IC-DISC must pass a qualified export receipt or QER test, which accounts for all gross receipts from selling export property, including by principal commission agents under the DISC. The principal does not have to be a related supplier.

An IC-DISC must pass a qualified export receipt or QER test, which accounts for all gross receipts from selling export property, including by principal commission agents under the DISC. Additionally, the IC-DISC’s combined taxable income must be accurately reported to ensure compliance with the IRS regulations, as this figure plays a critical role in determining the overall tax liability and benefits received from the IC-DISC structure.

The IC-DISC’s gross receipts rate during an average tax year should contain 95 percent qualified export receipts to pass the QER test.

An IC-DISC must also undergo a qualified export asset or QEA test. Under this test, an IC-DISC’s qualified export assets should be within 95 percent of the adjusted asset basis sum by the cessation of the tax year.

IC-DISC Reporting Requirements

Utilizing the IC-DISC export tax incentive entails reporting. For instance, the corporation must complete the form IRS 1120-IC-DISC, Interest Chart Domestic International Sales Corporation Return.

The form asks for gross income, cost of goods, total income, deductions, taxable income, net operating loss deductions, special deductions, and an optional refundable credit, which applies to corporations paying federal fuel tax.

Even if a corporation isn’t required to pay taxes due to the IC-DISC export tax incentive, they must still file taxes annually, a trademark of good business practices. They must keep records carefully, accurately, and annually.

Evaluating IC-DISC Suitability for Your Business

Has learning about IC-DISC export tax incentives inspired your business to look further into them? You must first determine your suitability by considering these factors.

• Can your corporation apply for IC-DISC status?
• Does your corporation meet the criteria for IC-DISC tax incentives?
• Can your corporation pass QER and QEA tests?

If you believe that IC-DISC status is the right call for your business, you can’t afford to work with anyone less than the experts. Export Tax Management Inc. has saved over $250 million for its clients with our services, including transaction-by-transaction optimization and more.

Experience the difference at Export Tax Management Inc.

Comparison with Other Tax Incentives

How does an IC-DISC export tax incentive stack up against other tax incentives like FDII

With IC-DISC explained, it’s only fair to delve deeper into FDII and how it works.

FDII is short for Foreign Derived Intangible Income. It’s a specialty earnings category from selling intellectual property products, including but not limited to trademarks and patents. Under an FDII, a corporation operates in the US and has IP rights in the country but makes IP-related sales outside the US.

With an FDII, the above sales enable a corporation to reduce its tax rate, with a standard rate of 13.125 percent. The introduction of FDII accompanied America’s shift to a territorial system from a worldwide one.

The FDII aims to motivate more businesses to hold IPs within the US.

An FDII operates a lot like a GILTI, short for Global Intangible Low Tax Income. A GILTI is a tax calculation that produces a max tax level based on the foreign earnings of a multinational corporation in the US.

GILTI came about in 2017 when the US introduced the Tax Cuts and Jobs Act. Since the TCJA can increase tax burdens for foreign profits, GILTI counteracts it, in a way. It also covers trademarks, patents, copyrights, and other intangible assets for the US’s switch to terrestrial taxes.

Getting back to FDII, a corporation can deduct a tax rate of 37.5 percent from their taxable income, reducing the dollar rate to 13.125 percent.

The difference between IC-DISC and FDII boils down to restrictions. FDII is not as limiting, as corporations needn’t have manufactured their products in the US as IC-DISC requires. The product also needn’t have been improved in the US.

However, both can offer tax incentives, so whether you should choose an FDII or IC-DISC depends on where you manufacture your goods. If it’s in another country despite being headquartered in the US, look into an FDII. Those corporations that make products in the US should consider an IC-DISC.

FAQs about IC-DISC Export Tax Incentive

I. What is the process to set up an IC-DISC?

Setting up an IC-DISC involves creating a separate legal entity, filing an election with the IRS, and meeting specific qualifications. Typically, you’ll need legal and tax experts to ensure compliance. The IC-DISC must also have its own bank account and books, separate from the parent company.

II. How much can a business save using an IC-DISC?

The tax savings from an IC-DISC can be substantial, often reducing the effective tax rate on export profits from around 37% to as low as 20%. The actual savings depend on factors like export volume, profit margins, and the structure of the IC-DISC.

III. Can service companies benefit from an IC-DISC?

Yes, service companies can benefit from an IC-DISC, but only if their services are related to the production, sale, or leasing of export property. For example, engineering or architectural services tied to export projects may qualify for the IC-DISC tax incentive.

IV. What happens if an IC-DISC fails to meet the qualifying criteria?

If an IC-DISC fails to meet the qualifying criteria, it risks losing its tax-exempt status. The IRS may disqualify the entity, resulting in back taxes, penalties, and interest. It’s crucial to maintain compliance with the specific rules governing IC-DISCs to avoid these issues.

V. Can a foreign-owned company establish an IC-DISC?

Yes, foreign-owned companies with U.S. subsidiaries can establish an IC-DISC, provided the subsidiary meets the IC-DISC requirements. The primary condition is that the export goods must be at least 50% U.S. content, allowing the subsidiary to benefit from the IC-DISC tax incentive.

Do you have more questions?

If you have more questions or need further details about how the IC-DISC export tax incentive can benefit your business, we’re here to assist.
Get in touch with our experts—we’re ready to help you maximize your export tax savings!

Book a Consultation Today for Your IC-DISC Export Tax Incentive

An IC-DISC export tax incentive helps qualifying companies incur more income by deferring tax payments and earning a commission. You must pass eligibility tests and have the right corporate structure to apply, but the benefits are more capital, the financial freedom to expand your product roster or further your business, and an increased sense of competition.

Export Tax Management Inc. are IC-DISC tax experts. Schedule a consultation with us to discuss your tax incentives and how you can begin enjoying perks today.