Export Subsidy Services, Ltd. 800-243-1372

How They Work
At-A-Glance
Structured IC-DISCs

A) Structure:

C-1 Delaware Corporation formed. Owned by Pass ThroughEntities /Individuals.
C-1 Elects IC-DISC (Tax Exempt) Status w/90days of formation.

B) Transaction Flow:

Assume Pass Through Exporter;
$1 million exports w/10% Profit.

		C-1	C-1
	Exporter	IC-DISC	Shareholders	Total
1) Exporter Profit	100,000			$100,000
2) IC-DISC Commission:
Maximum Allowed 50%	-50,000	$50,000
3) Dividend to Shareholder		-50,000	$50,000

4) Taxable Income	50,000	0	50,000	100,000
5) U.S. Tax Due 35% & 15%	-17,500	0	-7,500	-25,000

After Tax Cash Income	32,500	0	42,500	$75,000

• 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