Abstract

The caselet discusses the Domestic International Sales Corporation (DISC) system and its criticism by the global community. It primarily discusses the differences between the European Union (EU) and the US over the tariff barriers. It explores the American internal tax system that gives uneven advantage to the domestic players in the US market. It takes a look at the American Job Creation Act, 2004, and the highlights of the Act.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Introduction of Domestic International Sales Corporation (DISC) system in the US
• Replacement of DISC with Foreign Sales Corporation (FSC)
• Phase-out of FSC regime
• Enactment of Extraterritorial Income (ETI)
• and Enforcement of American Job Creation Act, 2004.

Keywords

Domestic International Sales Corporation (DISC), tax benefits, Foreign Sales Corporation (FSC), European Union (EU), World Trade Organization (WTO), Extraterritorial Income (ETI), foreign-source income, American Job Creation Act 2004, corporate tax rate, tax breaks, tax evasion