Do You Own a Non-US Affiliate? Take Note of a New Reporting Requirement

May 7, 2015|Tina Funk

If your organization owns a non-U.S. affiliate, you may be required to submit certain economic information to the U.S. Commerce Department’s Bureau of Economic Analysis (BEA).

The BE-10 Benchmark Survey of U.S. Direct Investment Abroad compiles economic data on the operations of U.S. parent companies and their foreign affiliates. The survey, completed every five years, determines the economic impact of these business enterprises. In the past, only those that were contacted by the BEA were required to file a report. A new rule in November 2014 now requires anyone meeting the reporting requirements to file, even if no contact by the BEA is received.

BE-10 deadline approaching May 29

If you owned or controlled—directly or indirectly—at least 10% of the voting interest of a foreign business at any time during your 2014 fiscal year, take heed. You will be required to file under the new BEA rule. Special rules apply to ownership of foreign partnerships in that the percent of voting interest is not always based on the ownership percentage, but is instead based on if the ownership interest is a general or limited ownership interest.

The filing deadline is May 29, 2015, and there may be large civil and criminal penalties for non-compliance. The BEA will consider extension requests for up to 1 month, if received before the due date.

Contacted by the BEA? You must respond.

If you were contacted by the BEA, you must respond regardless of whether or not you own a non-U.S. affiliate. If you did not have an interest in a foreign affiliate during your 2014 fiscal year, you only need to file Form BE-10, Claim for Not Filing.

Numerous forms

There are several BE-10 forms, and the form you will complete depends on the size of your foreign affiliates. As the “U.S. Reporter,” you must file Form BE-10A. The report filed for your foreign affiliate is based on the size of your affiliate (Form BE-10B, Form BE-10C, and/or Form BE-10D). You will submit these forms on behalf of your foreign affiliate, based on the information available to you.

Visit the BEA website for more information on this topic.

The forms require significant data, so don’t wait! Schenck can assist you with your BE-10 reporting requirements. If you have any questions, please contact Tina Funk at 800-236-2245.

Tina Funk, CPA, tax manager, is a member of Schenck’s International Tax team, providing expertise in international tax planning, including global entity structures, IC-DISC implementation and operation, and foreign national tax returns.