Foreign Sales Corporation - FSC

A A A

DEFINITION

A defunct provision in the U.S. federal income tax code which allowed for reduction in taxes on income derived from sales of exported goods. The code required the use of a subsidiary entity in a foreign country which existed for the purposes of selling the exported goods. The FSC evolved from 1971 tax legislation which provided benefits for domestic international sales corporations.

INVESTOPEDIA EXPLAINS

The tax provision was disputed by several countries on the grounds that is constituted an export subsidy that was not allowed under a certain international trade treaties. The foreign sales corporation was eliminated by the Extraterritorial Income Exclusion Act in 2000 which introduced new rules for income not subject to U.S taxation.








RELATED TERMS
  1. Foreign Corrupt Practices Act

    A United States law passed in 1977 which prohibits U.S. firms and individuals ...
  2. Foreign

    1. A non-U.S. company with securities trading on the North American market. ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country ...
  4. Tax Evasion

    An illegal practice where a person, organization or corporation intentionally ...
  5. Tax Shelter

    A legal method of minimizing or decreasing an investor's taxable income and, ...
  6. Controlled Foreign Corporation ...

    A corporate entity that is registered and conducts business in a different jurisdiction ...
  7. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate that some of the ...
  8. Global Recession

    An extended period of economic decline around the world. The International Monetary ...
  9. Economic Exposure

    A type of foreign exchange exposure caused by the effect of unexpected currency ...
  10. Heckscher-Ohlin Model

    An economic theory that states that countries export what they can most easily ...
Related Articles
  1. Safe Tax Planning For High-Net-Worth ...
    Taxes

    Safe Tax Planning For High-Net-Worth ...

  2. 10 Most Overlooked Tax Deductions
    Taxes

    10 Most Overlooked Tax Deductions

  3. That's A Tax Break?
    Taxes

    That's A Tax Break?

  4. New Tax Breaks You Need To Know
    Savings

    New Tax Breaks You Need To Know

  5. The Taylor Rule: An Economic Model For ...
    Economics

    The Taylor Rule: An Economic Model For ...

  6. Russian Interests
    Investing

    Russian Interests

  7. America The Youthful? Yes, On a Relative ...
    Investing

    America The Youthful? Yes, On a Relative ...

  8. Thoughts From The Frontline: Every Central ...
    Economics

    Thoughts From The Frontline: Every Central ...

  9. Sanctions Between Countries Pack a Bigger ...
    Economics

    Sanctions Between Countries Pack a Bigger ...

  10. Financialization
    Markets

    Financialization

comments powered by Disqus
Hot Definitions
  1. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  2. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  3. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  4. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  5. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
  6. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.
Trading Center