Related Foreign Export Corporation Law and Legal Definition

According to 26 USCS § 993 Title 26. Internal Revenue Code; Subtitle A. Income Taxes; Chapter 1. Normal Taxes And Surtaxes; Subchapter N. Tax Based On Income From Sources Within or Without the United States; Part IV. Domestic International Sales Corporations; Subpart A. Treatment of Qualifying Corporations],

In the case of a real property holding company, a foreign corporation is a related foreign export corporation if--

“(A) stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote is owned directly by the domestic corporation, and

(B) its exclusive function is to hold real property for the exclusive use (under a lease or otherwise) of the domestic corporation.”

In the case of an associated foreign corporation, a foreign corporation is a related foreign export corporation if--

“(A) less than 10 percent of the total combined voting power of all classes of stock entitled to vote of such foreign corporation is owned (within the meaning of 26 USCS § 1563(d) and (e)) by the domestic corporation or by a controlled group of corporations (within the meaning of 26 USCS § 1563) of which the domestic corporation is a member, and

(B) the ownership of stock or securities in such foreign corporation by the domestic corporation is determined (under regulations prescribed by the Secretary) to be reasonably in furtherance of a transaction or transactions giving rise to qualified export receipts of the domestic corporation.