|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
Economic Activity Management
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
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
||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.
||Meetings, conferences, promotional events and incentives,
and advertising (e.g., billboards) contracted for, arranged
for and paid by the IC-DISC or VIEXCO.
||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
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 Management
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 Financing
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
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 a Team Member at (340)774-7060 or TaxSupport@exportassist.com.