Foreign International Sales Corporation

Foreign International Sales Corporation

Summary of Foreign International Sales Corporation

A foreign corporation controlled by a Domestic International Sales Corporation

(read this and related legal terms for further details) (DISC) that satisfies the requirements of Section 993 of the Internal Revenue Code as follows:

1. The DISC must own directly, on each day of the taxable year, more than 50 percent of the rating stock of the foreign corporation.

2. Of the foreign corporation’s gross receipts 95 percent must be derived from “qualified export receipts”and interest on working capital and qualified accounts receivable.

3. “Qualified export assets”must account for 95 percent or more of the adjusted basis of all assets held by the foreign corporation.

The Foreign International Sales Corporation should not be confused with the Foreign Sales Corporation which was authorized by law in 1984 as successor to Discs.

See Foreign Sales Corporation Act.

(Main Author: William J. Miller)


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