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An Interest Charge Domestic International Sales Corporation, or IC-DISC, provides a permanent tax savings opportunity for qualifying U.S. exporters.
An IC-DISC is not a tax shelter. It is a paper entity designed solely for the purpose of realizing export tax savings.
An IC-DISC creates permanent tax savings by transferring income from the exporting manufacturer to the tax-exempt IC-DISC through an export sales commission. This commission is a tax deduction for the manufacturer, and the dividends paid from the IC-DISC are taxed at 15 percent only when paid to the shareholders. Assuming a 35 percent tax rate for the manufacturing entity, a 20 percent tax savings can be realized.
If your company is based in the U.S. and regularly exports products, you could realize substantial tax savings by forming an IC-DISC. At McGuire Sponsel, our approach is designed to minimize the filing and maintenance burdens for our clients while maximizing commissions and tax savings.