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HOME > EXPORT TAX BENEFITS > EXPORT ECONOMIC ACTIVITY SERVICES
 
EXPORT ECONOMIC ACTIVITY SERVICES

IN ORDER TO RECEIVE THE MAXIMUM AMOUNT OF EXPORT TAX BENEFITS, EXPORT ASSIST WILL ANALYZE AND MANAGE THE EXPORT ECONOMIC ACTIVITIES PERFORMED OUTSIDE OF THE CONTINENTAL UNITED STATES BY YOUR IC-DISC OR VIEXCO.

Our Export Economic Activity Services can have a positive effect on your corporate profit and loss statement and balance sheet by providing: lower daily sales outstanding (DSO); prompt and timely receipt of funds; elimination of costly document errors and inefficiencies; foreign buyer profiling; export financing; credit exposure monitoring; global risk; and, global treasury management. These services consist of:

Relating to Profit and Loss Statement

Relating to Balance Sheet

Export Economic Activity ManagementTop of Page
Export Assist can analyze your general P&L and segregate all related export expense activity together with related export income. From this, we can prepare a list of qualified expense activities that could be transferred to and performed by an Interest Charge Domestic International Sales Corporation (IC-DISC) or U.S. Virgin Islands Export Corporation (VIEXCO), thereby providing the broadest base of activity for a Section 482 transfer pricing study. As a guideline, the export economic activities include, but are not limited to, activities that satisfy the sales activity test and the foreign direct cost test that originally defined foreign economic processing. Although the sales activities and direct cost tests are to be done on a transaction-by-transaction basis, the grouping of transactions is allowed. There are four ways that transactions can be grouped to accomplish these tests: by product, by customer, by contract, or by product or product line with a customer or contract group.

Examples of export economic activity are:
Chart of Accounts Performed & Paid by the IC-DISC or VIEXCO
Marketing Aids Distributor kits, flip chart presentations and other marketing aids shipped on behalf of the IC-DISC or VIEXCO.
Shipping and Warehouse Stocking and shipping charges, cargo insurance and drayage on export transactions billed to the IC-DISC or VIEXCO. Worldwide warehousing contracts held and paid by the IC-DISC or VIEXCO.
Marketing Meetings, conferences, promotional events and incentives, and advertising (e.g., billboards) contracted for, arranged for and paid by the IC-DISC or VIEXCO.
Travel International-related expense vouchers sent to and paid by the IC-DISC or VIEXCO.

Certain activities may not be transferred to the IC-DISC or VIEXCO, such as the payroll belonging to U.S. employees working and housed within the continental United States and Puerto Rico, and the depreciation and amortization of the exporter’s U.S. properties.

Export Accounts Receivable ManagementTop of Page
Export Assist can manage the IC-DISC or VIEXCO’s export accounts receivable which can consist of invoices purchased at 100% of face value. These invoices can be created by the exporter for sale to its subsidiaries as inventory.

The assumption of this credit risk by the IC-DISC or VIEXCO creates a substantive risk foundation that provides one of the major income allocation elements in the Section 482 transfer pricing study. Unlike expenses charted on the P&L that have low risk (e.g., advertising), these items have a high risk and therefore there is a much greater opportunity to assign profit to them.

Export Assist can also manage and collect internal export accounts receivable. This would consist of international document support, accounts receivable ledger maintenance and pre-arranged restocking limit monitoring.

Export Inventory ManagementTop of Page
Export Assist can manage, on behalf of the IC-DISC or VIEXCO, the purchase, warehousing and sale of export property, with the IC-DISC or VIEXCO as exporter of record. In addition, the IC-DISC or VIEXCO could participate in the complete manufacturing process of the inventory from raw materials through finished goods.

Export Corporation FinancingTop of Page
Export Assist’s Export Corporation Financing helps the exporter to structure and manage buyer financing in order to complete and successfully ship the export order. Acting like your international credit and treasury department, we assist you in getting paid for your export orders by providing and managing the following export financing tools:

When you use Export Assist to service your export economic activity needs, you will also benefit from our ability to custom design a complete export tax plan that enables you to receive the maximum amount of export tax benefits. For more information, please contact Wendy Weir, Chief Operating Officer, at 800-894-8366 or wweir@exportassist.com.

 

 
   
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