University of Baltimore Law Review


In an effort to help the balance-of-payments deficit, the Revenue Act of 1971 included provisions authorizing creation of Domestic International Sales Corporations. Designed to discourage the continued use of foreign incorporated sales subsidiaries by domestic companies, election of DISC status permits an exporter to take maximum advantage of certain tax deferral provisions. However, the decision to "bring home" foreign sales subsidiaries to a domestic tax haven requires careful evaluation by the parent company. The author analyzes the problems incident to a decision to repatriate foreign subsidiaries and discusses the advantages in utilizing the DISC to overcome them.

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