Understanding Managerial Services [Internal Revenue]: A Comprehensive Guide
Definition & Meaning
The term managerial services refers to activities that support the operation of a foreign sales corporation (FSC) or a domestic international sales corporation (DISC) that generates income from foreign trading. These services are specifically related to the sale or lease of export property and include tasks that are necessary for the effective management of these corporations. However, managerial services do not encompass legal, accounting, scientific, or technical services. Examples of managerial services include conducting market research for exports, arranging shipping logistics, and engaging with potential international buyers.
Legal Use & context
Managerial services are primarily relevant in the context of international trade and taxation. They are utilized by businesses that operate as FSCs or DISCs to facilitate the sale of goods and services to foreign markets. Understanding this term is crucial for companies involved in exporting, as it helps determine the types of services that can be provided without incurring additional tax liabilities. Users can manage related legal processes effectively by utilizing legal templates available through US Legal Forms, which are designed to assist with compliance and documentation.
Real-world examples
Here are a couple of examples of abatement:
- Example 1: A company hires a consultant to conduct an export market study to identify potential customers in Europe. This activity qualifies as a managerial service.
- Example 2: A business arranges shipping logistics for goods being exported to Asia, which falls under the definition of managerial services. (hypothetical example)