The Nation’s Leader in Export Tax Benefit Services
AmCorp Management, Inc. has been
highlighted by the following media outlets




                                  Plus man...
AmCorp Management, Inc. is the Nation’s
Leader in Export Tax Benefit Services

AmCorp’s Tax Team is the Nation’s leader in...
EIE and IC-DISC Tax Provisions

What is EIE?
(EIE: Extraterritorial Income Exclusion: Income Exclusions on Income from ETI...
What The Experts Say About EIE

ETI Tax Benefits
“…the ETI tax regime provides permanent tax savings to those who
   lif t...
Extra-territorial Income Exclusion (EIE)

The EIE rule was signed into law on November 15, 2000. It is effective
for the t...
How The EIE Works

Income Statement                       Total Revenue                       Export Revenue
Gross Receipt...
What The Experts Say About IC-DISC

IC-DISC: Tax Benefits for Exports 2007
“The IC-DISC offers an opportunity for exporter...
What The Experts Say About IC-DISC



The IC-DISC rule was created by Congress in 1984 as a deferral
benefit for exporters...
How Company Export Taxes Are Paid
EIE Benefits



Shareholder owns their main
company and exports its
products directly to...
How The IC-DISC Works




Shareholder owns their main
company and exports its
products directly.
Shareholder creates an IC...
How The IC-DISC Works
Income Statement                        Total Revenue               Export Revenue
Gross Receipts   ...
What The EIE and IC-DISC
 Can Do For You

 EIE                                                                     IC-DISC...
Most Common Asked Questions

Shouldn’t I already be doing this?
Not necessarily, experience shows that less than 10% of th...
Our Process



P   id       ith         t      bli ti    f   ibilit t d
Provide you with a no-cost, no-obligation feasibil...
The Next Step

YOU
SUBMIT A LETTER OF UNDERSTANDING
PROVIDE COPIES OF THE FOLLOWING:
      Required tax records
      Cont...
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Export Tax Benefits

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If your companies products ends up outside the U.S. directly on indirectly through distributors you could be eligible for hundres of thousands of dollars in tax savings.

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  • Where can I find how the Export Tax benefits work ? You indicate that if it is done direclty or through distributors ?? how this comes by ?
    Regards,
    Gloria Grillo grillogloria@yahoo.com
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Export Tax Benefits

  1. 1. The Nation’s Leader in Export Tax Benefit Services
  2. 2. AmCorp Management, Inc. has been highlighted by the following media outlets Plus many more…
  3. 3. AmCorp Management, Inc. is the Nation’s Leader in Export Tax Benefit Services AmCorp’s Tax Team is the Nation’s leader in Export Tax Benefits. Our p p Tax Experts sole practice is identifying and securing Corporate Export Tax Benefits. We have one of the most experienced teams in the industry they partner industry, with some of the country’s leading CPA firms, Law firms, Private Equity firms and various professional financial services firms and institutions to help you not only reduce taxes but maximize cash flow. Today we are not here to sell you anything, we want to highlight a couple of opportunities which may dramatically increase you company’s company s operating capital and improve future corporate earnings. The two export tax areas we will discuss are the EIE and IC-DISC tax provisions.
  4. 4. EIE and IC-DISC Tax Provisions What is EIE? (EIE: Extraterritorial Income Exclusion: Income Exclusions on Income from ETI) (ETI: Extra-Territorial Income: Income earned from exporting goods outside the U S ) U.S.) The EIE are tax benefits and incentives that are available to any U.S. taxpayer that exports property that is manufactured or produced in the United States. Goods may also be manufactured outside the United y States, with some qualifying caveats. What is IC-DISC? (Interest-Charge Domestic International Sales Corporation) An IC-DISC is a domestic corporation formed to act as a commission agent f export sales. An t i i t for t l A IC-DISC provides huge permanent tax savings for privately held U.S. exporters by allowing a portion of the sales p p profits to be exempt from p the corporate tax (35%) by making it subject to a Capital Gains tax of 15%.
  5. 5. What The Experts Say About EIE ETI Tax Benefits “…the ETI tax regime provides permanent tax savings to those who lif t h l k th qualify, taxpayers who overlook these rules may miss opportunities to l i t iti t reduce their tax liabilities substantially.” - The Tax Advisor Extraterritorial exclusion and the FTC - (foreign tax credits) “More taxpayers that export goods are reaping the tax benefits from the extraterritorial income exclusion (EIE). The EIE allows a corporation to exclude qualifying foreign trade income (FTI) from income foreign-trade income. - USA Today International Tax Incentives Since Oct. 1 2000 U S exporters have been Oct 1, 2000, U.S. allowed to exclude certain export sales from federal taxable income. The tax benefit is an exclusion of 15 to 30 percent of export sales p p income from U.S. taxation. - Wall Street Journal
  6. 6. Extra-territorial Income Exclusion (EIE) The EIE rule was signed into law on November 15, 2000. It is effective for the transactions beginning on or after October 1, 2000. The EIE rule g g , is designed to promote exports by U.S. taxpayers. Taxpayers who export products are generally allowed an exclusion of a percentage of the income related to their exports exports. Applies to U.S. C Corporations, Foreign Corporations, U.S. S Corporations partnerships and individuals The benefits are much more Corporations, individuals. expansive than the prior Foreign Sales Corporation (“FSC”) rules. The Th EI rules allow t l ll taxpayers t amend previously to d i l filed returns to obtain any benefits available so long as the years involved are not closed under the statute of limitations (i.e., 3 years).
  7. 7. How The EIE Works Income Statement Total Revenue Export Revenue Gross Receipts $20,000,000 $6,600,000 COGS 60% (Cost of Goods Sold) ($12,000,000) ($3,960,000) Gross Margin $8,000,000 $2,640,000 SGA Expenses 50% (Sells & General Admin) $4,000,000 $1,320,000 Taxable Income $4,000,000 $1,320,000 Overall Profit Percentage 20.00 % 20.00 % Method of Calculating ETI Exclusion 15% of FTI (F i Trade IIncome) (Foreign T d ) $198,000 $198 000 1.2% of FTGR (Foreign Trade Gross Receipts) $79,200 Larger EIT Exclusion of the two methods $198,000 Effective Tax Rate 35.00% 2005 Federal Income Tax Savings (Fadeout = 80% of benefit) $55,440 2006 Federal Income Tax Savings (Fadeout = 60% of benefit) $41,580 “Consequently, time is ticking for U.S. exporters to claim EIE for previous tax years where qualified exports existed” - Tampa Bay Business Journal
  8. 8. What The Experts Say About IC-DISC IC-DISC: Tax Benefits for Exports 2007 “The IC-DISC offers an opportunity for exporters to convert ordinary income t i d t t to di id d income t taxed at 35 percent t dividend i taxable at reduced bl t d d rates.” - The Tax Advisor Interest-Charge Domestic International Sa es Co po at o te est C a ge o est c te at o a Sales Corporation Owner-managed exporting businesses can recoup — or even exceed — their tax savings by creating an interest charge-domestic international sales corporation (IC-DISC). - CFO.com Tax Economics Combined with the favorable dividend tax rules enacted under the Jobs and Growth Tax Relief Reconciliation Act of 2003, the IC-DISC now provides a permanent 20 percent tax savings for qualifying U.S. exporters. - New York Times
  9. 9. What The Experts Say About IC-DISC The IC-DISC rule was created by Congress in 1984 as a deferral benefit for exporters on the first $10M of qualified exports. Most taxpayers opted to utilize the more beneficial FSC rule that was repealed in 2000. However, Congress changed the dividend tax rate to 15% in 2003 and made the IC-DISC a very valuable export tax i incentive t privately h ld b i ti to i t l held businesses. It applies to: Manufacturers and Distributors Engineers and Architects who work on projects that are located abroad even if the work is performed in the US US.
  10. 10. How Company Export Taxes Are Paid EIE Benefits Shareholder owns their main company and exports its products directly to buyers out of the U.S. Borders. The Shareholder pays a 35% tax rate as normal income on the earnings received from the sell of their export products.
  11. 11. How The IC-DISC Works Shareholder owns their main company and exports its products directly. Shareholder creates an IC- DISC to provide exporting services through a commission agreement for goods sold outside the U.S. borders. The tax rate is now 15% from dividend income instead of the 35% tax rate from normal earnings. (The existence of the IC-DISC is transparent to all customers) customers).
  12. 12. How The IC-DISC Works Income Statement Total Revenue Export Revenue Gross Receipts (1/3 Export) $20,000,000 $6,600,000 COGS 60% (Cost f G d S ld) (C t of Goods Sold) ($12 000 000) ($12,000,000) ($3,960,000) ($3 960 000) Gross Margin $8,000,000 $2,640,000 SGA Expenses 50% (Sells & General Admin) $4,000,000 $1,320,000 Taxable Income $4,000,000 $1,320,000 Overall Profit Percentage 20.00 % 20.00 % Method of Calculating IC-DISC Deduction 50% of FTI (Foreign Trade Income) $660,000 4% of FTGR (Foreign Trade Gross Receipts) $264,000 $264 000 Larger IC Deduction of the two methods $500,000 Effective Tax Rate Without IC-DISC 35.00% Federal Income Tax Without IC-DISC $231,000 Effective Tax Rate With IC-DISC IC DISC 15.00% 15 00% Federal Income Tax With IC-DISC $99,000 Federal Income Tax Savings $132,000 “The IC-DISC will improve cash flow for any business that has a qualifying net income from export sales” - San Francisco Chronicle
  13. 13. What The EIE and IC-DISC Can Do For You EIE IC-DISC (For Years 2005 and 2006) (Current and Future Years) Provides an estimated Provides an reduction of 15 to 30% tax estimated 50% tax savings over standard savings over standard exporter tax filings. exporter tax filings. Q lif i f Qualifying foreign t d i i trade income i is Q lif i R i t Qualifying Requirements determined using one of the following three methods: Must be a US Corporation 15% of foreign trade net income method 95% of FTGR must be from export sales 1.2% of foreign trading gross receipts 95% of total assets must be qualified export from a transaction (but capped at 2X what assets on the close of each tax year Timely election to be treated as IC-DISC is earned under the income method) Cannot be part of a controlled group g 30% of the “foreign sales and leasing income” from the transaction (FTGR - Foreign Trade Gross Receipts)
  14. 14. Most Common Asked Questions Shouldn’t I already be doing this? Not necessarily, experience shows that less than 10% of the y p companies that qualify actually take advantage of these exclusions and incentives. Most of those are public companies who can afford to access specialty tax services, plus it is a very complex process. Will this cause an IRS audit? No, the IRS has defined the process for the EIE and IC-DISC procedures and when they are followed there are no problems. We have over 4,300 problem free tax clients. Plus if there ever is an issue with our work we stand behind it 100% with no cost to the client. How do I know if I qualify? By allowing AmCorp to do a no-obligation, no-cost Feasibility Study on your tax filings.
  15. 15. Our Process P id ith t bli ti f ibilit t d Provide you with a no-cost, no-obligation feasibility study This will: • Identify your EIE and IC-DISC tax savings • Outline the process • Outline our pre-determined flat based fee • Highlight your responsibilities • Detail the timeline of the process
  16. 16. The Next Step YOU SUBMIT A LETTER OF UNDERSTANDING PROVIDE COPIES OF THE FOLLOWING: Required tax records Contact Person AmCorp Management ANALYZE YOUR RECORDS PROVIDE A FEASIBILITY STUDY Upon approval of the Feasibility Study, we will prepare a quality and IRS approved filing documents for you to recover your additional tax revenue.

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