Chapter 18 - Foreign Sales Corporations

Chapter 18 - Foreign Sales Corporations

11.1802 Definitions.


As used in this chapter, unless the context clearly indicates otherwise:

(a) The terms "Foreign Sales Corporations", "FSC", "Small FSC", and "Foreign Trade Income" have the same meaning as are assigned those terms in Subpart C of Part III of Subchapter N of Chapter 1 of the United States Internal Revenue Code of 1954, as amended(relating to income from sources outside the United States); the term "FSC" shall include "Small FSC" unless otherwise indicated;

(c) The term "Internal Revenue Code" means the United States Internal Revenue Code of 1 954(Title 26, United States Code), as amended.

11.1803 Exemption of Foreign Sales Corporations from American Samoa Income Tax.


A corporation which is a Qualifying American Samoa Foreign Sales Corporation(within the meaning of 11.1807) for any taxable year is exempt from the payment of corporation income taxes on its net foreign trade income for that taxable year.

11.1804 Exemption of Foreign Sales Corporation shareholders.


No tax shall be imposed pursuant to sections 871(a)(l) and 881 of the Samoa Income Tax Act upon citizens and residents of the United States and upon corporations organized under the laws of any state of the United States with respect to items of income realized from sources within American Samoa from Qualifying American Samoa Foreign Sales Corporation(within the meaning of 11.1807) of which such citizens, residents or corporations are shareholders.

11.1805 Exemption of Foreign Sales Corporations from withholding taxes.


A corporation which is a Qualifying American Samoa Foreign Sales Corporation(within the meaning of 11.1807) is exempt from the obligation imposed by sections 1441 and 1442 of the Samoan Income Tax Act to withhold the tax imposed by sections 871(a) and 881 of the Samoan Income Tax Act on items of income of United States citizens and residents, or corporations organized under the law of any state of the United States, which are shareholders of the FSC.

11.1806 Exemption of Foreign Sales Corporations from excise taxes, customs duties, etc.


A corporation which is a Qualifying American Samoa Foreign Sales Corporation(within the meaning of 11.1807) is exempt from all excise taxes on imports imposed under chapter 10, Title 11, A.S.C.A., all excise taxes on exports imposed under chapter 15, Title 11, A.S.C.A., and all other customs duties on imports.

11.1807 Qualifying American Samoa Foreign Sales Corporations.


(a) For purposes of this title, the term of Qualifying American Samoa Foreign Sales Corporation means a corporation which satisfies the following requirements:

(1) It is a Foreign Sales Corporation within the meaning of section 992 of the Internal Revenue Code of 1954, as amended, and otherwise satisfies the requirements of Subpart C of Part III of Subchapter N of Chapter 1 of the Internal Revenue Code of 1954, as amended;

(2) It was created or organized under the laws of American Samoa;

(3) At all times during the taxable year, it maintained a bank account in American Samoa and all dividends, legal and accounting fees, and salaries of officers and members of the board of directors of the corporation disbursed during the taxable year are disbursed from the bank account; provided, however, that this requirement does not apply to a Qualifying American Samoa Foreign Sales Corporation that also qualifies as a small FSC;

(4) It has not at any time during the taxable year engaged within American Samoa in the manufacturing, production. or processing or products;

(5) It was not granted a tax exemption from the Government of American Samoa pursuant to the provisions of chapter 16, Title II, A.S.C.A., prior to the effective date of this chapter; and

(6) It has made an election(at the time and in the manner provided in 11.1808) which is in effect for the taxable year to be treated as a Qualifying American Samoa Foreign Sales Corporation.

11.1808 Election of status as Qualifying American Samoa Foreign Sales Corporation.


(a) Time for Making. An election by a corporation to be treated as a Qualifying American Samoa Foreign Sales Corporation under 11.1807 shall be made by such corporation for a taxable year at any time during the period beginning 60 days immediately preceding and ending 60 days immediately succeeding the beginning of the taxable year except that the Tax Manager of American Samoa, may consent to and designate the making of an election at other times.

(b) Manner of Election. An election under subsection(a) shall be made by filing a letter electing Qualifying American Samoa Foreign Sales Corporation status with the Tax Manager of American Samoa.

(c) Effect of Election. If a corporation makes an election under subsection(a), then the provisions of this chapter apply to the corporation for the taxable year which the corporation elected and for all succeeding taxable years until the election is terminated.

(d) Termination of Election. An election under this section may be terminated by revoking the election for any taxable year of the corporation after the first taxable year in which the election is effective. A termination of election under this paragraph is effective;

(1) for the taxable year in which made, if made at any time during the first 90 days of such taxable year; or

(2) for the taxable year following the taxable year in which made, if made after the close of such 90 days, and for all succeeding years of the corporation. Termination is made by filing with the Tax Manager, Government of American Samoa, Pago Pago, American Samoa, 96799, a letter revoking the election.

11.1809 Ten-year exemption.


Upon application to the Tax Exemption Board, a qualifying American Samoa Foreign Sales Corporation which incorporates before 1 January 1987 may be granted an exemption from income tax, withholding taxes, excise taxes and customs duties for which provision is made in 11.1803 through 11.1806 for a period of 10 years from the date of incorporation.

11.1810 Rules and regulations.


The Tax Manager of American Samoa shall promulgate such rules and regulations as are necessary for the implementation of this chapter.

11.1811 Franchise tax on Qualified American Samoa Foreign Sales Corporations.


(a) Effective 1 October, 1984, a franchise tax is imposed on each Qualified American Samoa Foreign Sales Corporation incorporated under the laws of American Samoa at any time during the taxable year. The franchise tax shall be referred to as the FSC Franchise Tax.

(b) The amount of the FSC Franchise Tax shall be $2,500 per annum; provided, however, that in the case of a Qualified American Samoa Foreign Sales Corporation that qualifies as a Small FSC the tax shall be $500 per annum.

(c) The FSC Franchise Tax for the first taxable year is payable on the date of incorporation of the Qualifying American Samoa Foreign Sales Corporation and for each taxable year thereafter is payable on the first day of the month in which the anniversary of incorporation occurs.

11.1812 Modification of corporation law as regards Qualifying American Samoa Foreign Sales Corporations.


(a) So long as a corporation is a Qualifying American Samoa Foreign Sales Corporation (within the meaning of 11.1807) and otherwise satisfies the requirements of this chapter, the Governor of American Samoa shall not act pursuant to 30.0102 to revoke, set aside, or alter the corporation’s certificate of incorporation.
(b) The requirement of 30.0105 that a corporation must maintain its principal place of business in American Samoa shall not apply to Qualifying American Samoa Foreign Sales Corporations.