Foreign Trading Gross Receipts [Internal Revenue] Law and Legal Definition

Pursuant to 26 CFR 1.924(a)-1T (a) [Title 26 Internal Revenue; Chapter I Internal Revenue Service, Department of the Treasury; Subchapter A Income Tax; Part 1 Income Taxes; Normal Taxes and Surtaxes; Tax Based on Income from Sources within or without the United States; Earned Income of Citizens or Residents of United States; Earned Income of Citizens of United States], the term Foreign Trading Gross Receipts means “any of the five amounts described in paragraphs (b) through (f) of this section, except to the extent that any of the five amounts is an excluded receipt within the meaning of paragraph (g) of this section. These amounts will not be foreign trading gross receipts if the FSC is not managed outside the United States, pursuant to section 924(c) [26 USCS § 924(c)], or if the economic processes with regard to a transaction, or group of transactions, that are required of a FSC by section 924(d) [26 USCS § 924(d)] do not take place outside the United States. The requirement that these activities take place outside the United States does not apply to a small FSC. The activities required by sections 924 (c) and (d) [26 USCS § 924 (c) and (d)] may be performed either by the FSC or by any person (whether or not related to the FSC) acting under contract with the FSC for the performance of the required activities. Sections 1.924(c)-1 and 1.924(d)-1 provide rules to determine whether these requirements have been met. For purposes of this section --

(1) FSC. All references to a FSC in this section mean a FSC, except when the context indicates that such term means a corporation in the process of meeting the conditions necessary for that corporation to become a FSC. All references to a FSC in this section shall include a small FSC unless indicated otherwise.

(2) Sale and lease. The term "sale" includes an exchange or other disposition and the term "lease" includes a rental or a sublease. The term "license" includes a sublicense. All rules under this section applicable to leases of export property apply in the same manner to licenses of export property. See § 1.927(a)-1T(f)(3) for a description of intangible property which cannot be export property.

(3) Gross receipts. The term "gross receipts" is defined by section 927(b) [26 USCS § 927(b)] and § 1.927(b)-1T.

(4) Export property. The term "export property" is defined by section 927(a) [26 USCS § 927(a)] and § 1.927(a)-1T.

(5) Controlled group. The term "controlled group" is defined by paragraph (h) of this section.

(6) Related supplier and related party. The terms related supplier and related party are defined by § 1.927(d)-2T.”