February 12, 2019

Foreign-Derived Intangible Income Deduction: Is your company eligible?

No items found.
Ready to find your business’ potential?
contact us
back to insights

Enacted by the Tax Cuts and Jobs Act, the Foreign-Derived Intangible Income (FDII) deduction establishes preferential tax treatment for domestic C corporations serving foreign markets. The deduction is equal to 37.5% of the C corporation’s foreign-derived intangible income.

Companies with eligible income can take advantage of this incentive by claiming a permanent deduction against taxable income, thus lowering the cost to enter foreign markets. The deduction effectively reduces the tax rate on qualifying foreign derived income from 21% to as low as 13.125% through 2025. Companies, large and small, public and private, may take advantage of the deduction. In many cases, the tax savings are substantial.

Your C corporation may qualify if you have income from any of the following:

  • Sales of property to foreign persons that result in foreign use.
  • Sales include any lease, license, exchange, or other disposition.
  • Services provided to any person not located within the U.S. or any services provided with respect to property not located within the U.S.

Elliott Davis has prepared a downloadable PDF detailing information on the Foreign-Derived Intangible Income deduction and how we can assist with more information.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.

links and downloads.

Ready to find your business’ potential?

get in touch

download the white paper

meet the author

meet the authors

No items found.

contact our team.