FOREIGN DERIVED INTANGIBLE INCOME, OR FDII

FOREIGN DERIVED INTANGIBLE INCOME, OR FDII

FOREIGN DERIVED INTANGIBLE INCOME, OR FDII

The 2017 tax law, TCJA, provided U.S. C Corporations a new incentive for the export of products and services. The provisions are called Foreign Derived Intangible Income, or FDII. Generally, the rules provide a reduction in the federal tax rate on a computed profit from such exports. In order to compute and document the incentive, it is expected that compliance with these rules will involve substantial tax advisory fees. Our goal here is to announce the existence of these provisions and to request that you contact us if you believe that your company may have tax savings opportunities.

The following are the general requirements in order to receive benefits:
1) Your company is a C Corporation, or it has elected to be treated as a C Corporation.
2) The company provides products, services, licenses, or intangibles to end users outside the U.S.
3) The company provides, or delivers these products and services directly to the non-U.S. end users.
4) The end users are not a related party to the C Corporation.
5) Your company is profitable and a tax reduction would be beneficial.

If you believe that your company might benefit from these provisions, be sure to give us a call.