Foreign-Derived Intangible Income Reference Guide
Brochure
February 21, 2022
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Enacted as part of the Tax Cuts and Jobs Act of 2017, Foreign-Derived Intangible Income (FDII) is an export tax incentive available to domestic C-corporations which allows for a permanent deduction on taxable income up to 37.5%.
To qualify, a domestic C-corporation should have the following types of foreign-derived income earned from its unrelated or related party customers:
The FDII deduction is calculated from the excess of export sales and services income above a 10% rate of return on the corporation’s tangible depreciable assets. Additionally, the deduction is available to those corporations with positive taxable income after applying available net operating losses.