IC-DISC: a Way to Reduce Income Tax for Exporters

We partnered with our members MANTEC and Stambaugh Ness for a webinar presentation on "Tax Benefits for Companies that Export Goods and Services" , which was offered on January 27 and is available for anyone interested at the Stambaugh Ness website.  Follow this link and you can listen to the entire webinar at your convenience.

Jolleen E. Biesecker, Stambaugh Ness' Tax Director, provided a great overview of the tax device called the Interest Charge Domestic International Sales Corporation, or IC-DISC. The IC-DISC allows exporters of goods and services to defer income tax from profits on export sales and potentially pay qualified dividends to owners at a 15% tax rate.

There have been other tax devices in the past, which have been challenged by the World Trade Organization and subsequently repealed, but the IC-DISC remains a valid alternative. 

Some of you may remember that in 1984 the DISC, or Domestic International Sales Corporation, was challenged as an illegal export subsidy and repealed.  The DISC was replaced with the Foreign Sales Corporation, or FSC, which also allowed a partial tax exemption for exporters.  In 1999, the World Trade Organization ruled that the FSC also constituted and illegal export subsidy, and thus it too was repealed.  In 2000, the "extraterritorial income exclusion", or EIE, was instituted, which again provided tax benefits for exporters, but the American Jobs Creation Act of 2004 dealt a significant blow to U.S. exporters by phasing out the EIE.  Prior to the phase-out of the EIE, the IC-DISC received scant attention in the business world. But it's once again in the spotlight as a useful tool.

Legal Issues Overview Starts 2011 Seminar Series

We were off to a great start in 2011 with our first program focusing on legal issues of exporting. 

WTC member Louis Dejoie,  Chair of the International Law Practice Group with McNees, Wallace and Nurick LLC presented the executive overview.  Here is a summary of key topics:

  

§     EXPORT SALE BASICS

  - legal framework of sales contracts

  - INCOTERMs

§     USE OF FOREIGN INTERMEDIARIES

  -  issues to consider regarding intermediary relationships, including those of agents, distributors and employees stationed in a foreign country  such as labor laws, termination laws, registration and antitrust laws

  - due diligence when choosing an intermediary 

  - Know Your Partner!!!

§     IP PROTECTION

  - patents, trademarks and copyright issues

§     COMPLIANCE PROGRAMS

  -  Importance of having formal written policies and procedures

  -  Appoint an Export Compliance Officer

  - EAR, ITAC and OFAC

Business Roundtable with Kenyan Ambassador

We were honored to be partnering with Senator Brubaker to host H.E. Ambassador Elkanah Odembo, Kenyan Ambassador to the United States for a business roundtable on December 17th.  The Linden School for Girls in Lititz generously donated space for the event and the US-Kenya Chamber of Commerce was instrumental in arranging this opportunity.   Ambassador Odembo provided an overview of Kenya's growing economy, stressing opportunities in the energy sector.  Here are some highlights:

 Kenya is a Key Trading Partner of the United States

• Over $1 billion in annual trade (imports and exports)
• U.S. Exports to Kenya total around $600 million annually
• U.S. Exports include Aircraft, Industrial Machinery, Electrical Machinery, Vehicles, Cereals, Vegetable Oils, and Coarse Grains with opportunities for more product and service introductions.
  

Kenya is East Africa’s largest regional economy with a sophisticated and highly deregulated free market that is experiencing aggressive growth in the following sectors:

•  Infrastructure Development
• Renewable and Alternative Energy
•  Information Communications Technologies
• Finance and Banking
• Agri-Business and Agro-Processing
• Tourism and other industries 
• Manufacturing
• Healthcare









Senator Brubaker and Ambassador Odembo











Annual Holiday Luncheon Focus was Poland

Magda Kubiak and Ann Moffitt

Over 70 members and guests attended the WTC's annual holiday luncheon at the Out Door Country Club in York this year.  As always, we had one of our members present information about  holidays and gift giving practices in a specific country.  Our featured member was Keystone Human Services and attendees had a chance to learn more about the many services that Keystone provides - not just in the southcentral PA region, but worldwide.  Ann Moffitt, Vice President of Community Development for Keystone Human Services and CEO of Keystone Partnership shared more about the agencies activities in Russia and Moldova and explained how Keystone Human Services hosts foreign social workers and graduate students to introduce them to how social services are administered in the United States.  Ann then turned the program over to Magda Kubiak, a graduate student from Poland currently doing her internship with Keystone Human Services.  Magda gave a wonderful presentation about Polish holiday customs, including the foods associated with various festivities.

Here is a brief listing of the major holidays in Poland:



u January, 1^st – New Year's Day

u January, 6^th – Epiphany

u Spring – Easter

u May, 1^st – Labor Day

u May, 3^rd – Constitution Day

u 9^th Thursday after Easter – Corpus Christi

u August, 15^th – Assumption of the Blessed Virgin Mary; Polish Army Day

u November, 1^st – All Saints' Day

u November, 11^th – Independence Day

u December 25^th, 26^th - Christmas

We would like to thank our sponsors, whose generous support helped make this event possibe:  MANTEC, Inc. and Cumberland County Economic Development.