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The domestic international sales corporation is a provision unique to tax law in the United States. In 1971, the U.S. Congress voted to subsidize exports of U.S. made goods through the income tax law. The initial mechanism was through a Domestic International Sales Corporation (DISC), an entity with no substance which received tax benefits. Today, shareholders of a DISC continue to receive reduced income tax rates on qualifying income from exports of U.S. made goods. A DISC is a U.S. corporation which has elected DISC status and meets certain other largely symbolic requirements.〔(26 USC 992 ).〕 A corporation so electing is not subject to U.S. Federal income tax.〔(26 USC 991 ).〕 Properly structured, a DISC has no activities other than on paper and no activities not related to the export of qualifying goods.〔DISC status may be lost if the DISC has non-qualifying receipts or assets in excess of 5% of its total receipts or assets. However, to prevent inadvertent loss of the intended benefits, DISC rules permit a DISC to elect to make distributions or deemed distributions retroactively. 26 USC 992(c), supra.〕 Mechanism for benefit: A DISC contracts with a producer or reseller of U.S. made goods or provider of certain qualifying construction-related services to provide "services" to such related supplier for a fee. The fee is determined under formulas and rules defined in the law and regulations.〔(26 USC 994 ) and regulations thereunder.〕 Under these regulations, the fee is deductible by the related supplier and results in a specified net profit to the DISC. This net profit is not subject to Federal income tax. The DISC then distributes the profit to its shareholders, who are taxable on the income as a dividend.〔(26 USC 995 ).〕 If the shareholders are U.S. resident individuals or others eligible for the reduced rate of tax (now 15%) on dividends, then the tax rate on the income allocated to the DISC is reduced. The pricing rules in the law and regulation are independent of the transfer pricing rules normally applicable to transactions between related parties. Thus, DISC profits are not dependent on the economic contribution of the DISC, and a DISC need have no substance. Since a DISC has no substance, implementation and maintenance is fairly easy. Complexities can arise, however, in making calculations of the permitted DISC income due to rules designed to help maximize the subsidy.〔26 CFR 1.994-1 and -2.〕 These rules include a "no loss" rule, overall profit percentage, grouping, marginal costing and other techniques, use of which may be improved by software tools. Additional substantial rules apply.〔(See 26 USC sections 991-997 ) and (regulations ) thereunder.〕 DISCs were challenged by the European Community under the GATT. The United States then counterclaimed that European tax regulations concerning extraterritorial income were also GATT-incompatible. In 1976, a GATT panel found that both DISCs and the European tax regulations were GATT-incompatible. However, these cases were settled by the Tokyo Round Code on Subsidies and Countervailing Duties (predecessor to today's SCM), and the GATT Council decided in 1981 to adopt the panel reports subject to the understanding that the terms of the settlement would apply. However, the WTO Panel in the 1999 case would later rule that the 1981 decision did not constitute a legal instrument within the meaning of GATT-1994, and hence was not binding on the panel. The Foreign Sales Corporation (FSC) was created in 1984 to replace the DISC. == See also == * Foreign Sales Corporation * Extraterritorial income exclusion 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Domestic international sales corporation」の詳細全文を読む スポンサード リンク
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