IC-DISC icon


Are you the owner of a profitable operating business that sells into foreign countries? If most of your production costs are in the U.S., you may have the opportunity for substantial tax savings through an IC-DISC. Forming an Interest Charge Domestic International Sales Corporation, or IC-DISC, is a highly effective tax incentive for companies that export from the U.S. This separate tax-free corporate entity acts as a selling agent for sales to foreign countries.

Benefits of implementing an IC-DISC include:

  • Sales commissions paid to the IC-DISC are tax-deductible to the operating business
  • Dividends paid to shareholders are taxed at a favorable dividend rate
  • Profits may be accumulated for estate planning
  • Income can be shifted to lower tax bracket taxpayers

Examples of qualifying companies include those who manufacture goods in the U.S. and export them to Canada. The opportunity also includes companies providing certain services, such as engineering and architectural, that are used in building structures in foreign countries, as well as companies manufacturing goods that are used in an exported product.

IC-DISC Requirements: Lumsden McCormick Can Help You Gain the Advantage

Like any other tax incentive, there are certain IC-DISC requirements that must be met and restrictions on the types of products that qualify. For example, a corporation must be incorporated in one of the 50 states or District of Columbia and file an election with the IRS to be treated as an IC-DISC for federal tax purposes. Further, the corporation must have a single class of stock and maintain a minimum capitalization of $2,500.

There are also a number of complex rules on how to compute the sales commission, but properly structured, our international tax experts can help you can maximize the income that is sheltered by the IC-DISC.

For more information about IC-DISC services from Lumsden McCormick, contact Mark Janulewicz or a service leader or complete the information below.

Services Leaders

Mark Janulewicz

Mark G. Janulewicz, CPA

Amanda Mooney

Amanda L. Mooney, CPA


Upcoming Events

Webinar Series Part V: Changes to Lease Accounting and How it Impacts Your Organization

Webinar Series Part V: Changes to Lease Accounting and How it Impacts Your Organization

July 27, 2021

The accounting for leases is changing significantly. The required implementation of FASB ASC 842 will mandate that most leases are included on the balance sheet as a right-of-use asset, with a corresponding lease liability. The new standard will impact nearly all commercial businesses and nonprofit organizations and is effective for annual reporting periods beginning after December 15, 2021.

Learn More
Webinar Series Part VI: The Pandemic and the Economy - Where Are We Now?

Webinar Series Part VI: The Pandemic and the Economy - Where Are We Now?

August 10, 2021

As everyone knows, the COVID-19 pandemic has had a global impact beyond health and safety concerns.  With millions of Americans vaccinated, where does the economy stand and what can be expected across the Upstate region, New York State, the United States, and Canada?

Learn More

Comprehensive. Proactive. Accessible.
How Can We Help?