The Foreign International Sales Corporation (FISC) is now becoming an important adjunct to DISC.1 Although relatively few exporters formed FISCs during the early years of the DISC program, interest in FISC has been increasing rapidly during the past few years. However, much of the current interest in FISC results from a desire to counteract the adverse impact of the new incremental rules.2
A FISC is an enormously versatile tax entity that can produce a wide variety of tax benefits.3 If appropriately structured, it can increase DISC tax deferra14 or provide foreign tax credit benefits, and sometimes do both.5
There are a number of uses for a FISC. Most FISCs are engaged in international sales, 6 but FISCs can also be used for international leasing7 and for related and subsidiary services.8
A wide variety of structures can be used for a FISC. A FISC can
1. § 993(e) (1 ); Prop.
Reg. § 1.993-5 (b).
2. § 995 ( e ) ; see Feinschreiber, Unde1'standing the DISC Incremental Rules, 3 INT'LTAXJ.305 (1977).
3. See Feinschreiber, FISC: The Foreign Inte1'national Sales Corporation, 1 INT'L TAX J. 214 ( 1975) ; Feinschreiber, FISC-A Foreign Selling Arm of DISC, U.S. TAX. OF INT'L OPERATIONS 119516 ( 1975 ).
4. See §§ 993 (a) ( 1) (E) , 993 (b ) ( 6) ; Feinschreiber, FISC: The Foreign In- r te1'national Sales Corporation, 1 INT'L TAX J. 218 ( 1975) .
5. See Bailey, DISC and the Foreign Tax Credit, 1 INT'L TAX J. 225,227 (1975).
7. §§993(e)(I)(B),993(a)(I)(B). 8. §§993(e)(1)(B),993 (a)(I)(C).