Various services are eligible for DISC benefits: related and subsidiary services 1 engineering and architectural services,2 and DISC managerial services.3 The new incremental rules have made the inclusion of these services within a DISC even more advantageous.4 This chapter examines the qualification requirements for these services.
Related and Subsidiary Services
Services performed in conjunction with exports can qualify as
related and subsidiary services. Receipts from these services
are qualified export receipts5 and assets used in the performance
of these services are qualified export assets.6
Related and subsidiary services are generally considered in relation to sales, but services connected with exchanges, leases, rentals, and other dispositions of export property by a DISC can also qualify as related and subsidiary services.7
1. §993(a)(I)(C).
2. §993(a)(I)(G).
3. §993(a)(I)(H).
4. See § 995 ( e ) ( 4) ; Feinschreiber, Understanding
the DISC Incremental Rules, , 3 INT'L TAX J. 305 ( 1977) ;
Green, Obtaining DISC Benefits for International Services,
3 INT'L TAX J. 467 ( 1977) .
5. § 993 (a) ( 1) (C) ; see also R. FEINSCHREIBER,
TAX INCENTIVES FOR U.S. i EXPORTS, (Oceana Publications, Dobbs
Ferry, N.Y., 1975) 40 (hereafter R. FEINSCHREIBER) ; Green, N.
4 supra.
6. §993(b)(2). )
7. §993(a)(I)(C).
