Export Tax

Import versus export taxes

Import taxes and export taxes have been utilized throughout history in an attempt to control the flow of resources, product and services into and out of a country. Protectionism and free trade are opposing economic strategies countries implement for influencing their economic growth. Import taxes are often in the form of tariffs, but have fallen sharply out of favor within the global community, even to the extent that there have been disagreements between the United States and the World Trade Organization. 

Export taxes have been used to limit the flow of resource leaving a country. However, the U.S. also uses export taxation as a method of encouraging oversea investments. As the global community becomes more integrated, the IRS now only allows one form of income tax incentives for exporters. Interest charge domestic international sales corporations or IC-DISC, is the last income tax incentive US exporting companies have for reducing their U.S. income tax liabilities 

Is my company eligible for IC-DISC?

Under the current IRS guidelines, only three types of companies are eligible for export tax incentives. They include direct exporters that ship manufactured goods to be sold or used or consumed in a foreign country, indirect exporters, which include manufacturers who produce components to goods that ultimately end up in foreign countries within a specified time limit and brokers who resale US products abroad but do not the manufacturer, and certain architectural and engineering services. There are many companies that do not realize they are eligible to create an IC-DISC.

Example industries that may be directly affected by IC-DISC benefits and export tax management:

  • Agriculture and Food Processing
  • Metal fabrications
  • Manufacturing
  • Film and Recording
  • Heavy equipment
  • Architectural and Engineering services
  • Pharmaceuticals
  • Distribution
  • Software and Technology
  • Aerospace and Defense
  • Mining and Minerals

Export tax planning

Export tax planning can provide insights for further profitability through the substantial reduction of income tax liabilities. Taking the appropriate steps before beginning a project can be the difference between a successful strategy and failure. Reviewing the same export tax plans afterward can aid in streamlining the company and maximizing tax incentives in conjunction with intercompany transactions, cost-sharing agreements, and transfer cost studies.

Expert export tax advisors 

PIASCIK has been recognized as an industry leader in IC-DISC matters with over 75 years of combined international tax experience with representation in over 49 countries and on every continental except Antarctica.  We can also help you with any plans of expanding your operations there as well. PIASCIK understands how important it is to reduce you company's costs. Our expert international tax professionals offer flat rates and fixed fee engagements as an economical alternative to the ongoing expenses and hidden surcharges that typical, large tax institutes charge. PIASCIK even offers the initial consultation and feasibility for FREE to get you started in the right direction without demanding any further obligation from you or your company.  Contact PIASCIK today and discover how our expert tax services can help you.