FOREIGN SALES CORPORATIONS, or FSCs, remain under fire

FOREIGN SALES CORPORATIONS, or FSCs, remain under fire

July 01, 2000

FOREIGN SALES CORPORATIONS, or FSCs, remain under fire.

The European Union rejected a US proposal to allow foreign companies to claim FSC benefits provided they subject themselves to US taxation. The European Union viewed the proposal as disingenuous. Negotiations have moved out of the public eye. US companies that export through offshore, but largely paper, subsidiaries can reduce US taxes on the export earnings by 15% to 30%. Some US-made turbines have been financed through FSC leases. The US is under orders from the World Trade Organization to modify the FSC rules by October 1 or risk trade sanctions. The WTO called them an illegal export subsidy.

Keith Martin