Foreign Sales Corporation (FSC) was a type of tax device allowed under the United States Internal Revenue Code that allowed companies to receive a reduction in U.S. federal income tax for profits derived from exports.
The FSC was created in 1984 to replace the old export-promoting tax scheme, the Domestic International Sales Corporation, or DISC.
These cases were settled, however, by the Tokyo Round Code on Subsidies and Countervailing Duties, predecessor to today's Subsidies and Countervailing Measures (SCM), and the GATT Council decided in 1981 to adopt the panel reports subject to the understanding that the terms of the settlement would apply.
In March 2000, the Appellate Body of the WTO found that the FSC provisions of U.S. law constituted a prohibited export subsidy under the General Agreement on Tariffs and Trade (GATT) Uruguay Round code on Subsidies and Countervailing Measures.
The European Union (EU) challenged ETI in 2001, claiming the new law did not properly implement the earlier WTO decision.
The United States did not meet the deadline to implement this decision and, on 30 August 30, 2002, the WTO approved the European Union request for over US$4 billion in retaliatory tariffs.
Most observers viewed it as unlikely that the European Union would implement the sanctions, since the disruption that would be caused to transatlantic trade would rebound on European companies;[citation needed] it is likely rather than the EU will seek to use the threat of sanctions as a bargaining chip to obtain concessions from the US in other areas.
104, 110 (2017), the U.S. Court of Federal Claims stated:In 1971, Congress “provided special tax treatment for export sales made by an American manufacturer through a subsidiary that qualified as a ‘domestic international sales corporation’ (DISC).” Boeing Co. v. United States, 537 U.S. 437, 440 (2003) (footnote omitted).
on Finance, Deficit Reduction Act of 1984, Explanation of Provisions Approved by the Committee on March 21, 1984, S. Print No.
on Taxation, 98th Congress, General Explanation of the Revenue Provisions of the Deficit Reduction Act of 1984 (Comm.