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Export Subsidy Services, Ltd.
8132 Camino Del Sol
La Jolla California 92037
TEL: 800.243.1372
FAX: 858.459.6999
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How They Work
At-A-Glance
Structured IC-DISCs
A) Structure:
- C-1 Delaware Corporation formed. Owned by Pass Through Entities
/Individuals.
- C-1 Elects IC-DISC (Tax Exempt) Status w/90 days of formation.
B) Transaction Flow:
Assume Pass Through Exporter;
$1 million exports w/10%
Profit.
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C-1 |
C-1 |
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Exporter |
IC-DISC |
Shareholders |
Total |
| 1) Exporter Profit |
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100,000 |
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$100,000 |
| 2) IC-DISC Commission: |
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Maximum Allowed 50% |
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-50,000 |
$50,000 |
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| 3) Dividend to Shareholder |
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-50,000 |
$50,000 |
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| 4) Taxable Income |
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50,000 |
0 |
50,000 |
100,000 |
| 5) U.S. Tax Due 35% & 15% |
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-17,500 |
0 |
-7,500 |
-25,000 |
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After Tax Cash Income |
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32,500 |
0 |
42,500 |
$75,000 |
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• C-1 is a tax exempt entity. Income is normally taxed to its shareholders,
as a
dividend. The exception being IRA Shareholders, where the Dividends are taxed as UBI.
With profit Margins of 8% or more the Tax Benefit is about 10% of the Foreign Profit.
With profit Margins of 4% or less the Tax Benefit is equal to 20% of the Foreign Profit.
The Export Subsidy Company
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