This is an update to our Tax Alert issued on May 12, 2015. The surveys are currently required to be completed by individuals and businesses that own 10% or more of a foreign business and also by U.S. businesses that are at least 10% foreign owned. The U.S. Bureau of Economic Analysis (BEA) has extended the filing deadline for all new filers of Form BE-10 to June 30, 2015.Penalties apply for failure to file the surveys.
The BEA, an agency of the U.S. Department of Commerce, is granted the authority to collect data via surveys: quarterly, annually and every 5 years (this benchmark survey is in lieu of the annual survey and is the most comprehensive). The BEA requires reporting by:
- Individuals who own at least 10%, directly or indirectly, of any foreign business enterprise;
- Businesses who own at least 10%, directly or indirectly, of any foreign business enterprise, including unincorporated branches; and
- U.S. businesses who are or become at least 10% foreign owned.
It should also be noted that there are additional reporting requirements (BE-13) for the creation of new business ventures, acquisitions, and the start of certain business expansions, when funded by foreign investment (defined to equate to 10% or more ownership or control, directly or indirectly, of the voting power of a U.S. corporation or presumably capital or profits interest of a U.S. partnership), if the transaction occurred after 1/1/2014. Affected U.S. business enterprises must file the report within 45 days after the event.
The information requested by these surveys is usually NOT found in financial statements or income tax returns, and often involve: plant or equipment expenditures, employment statistics, research and development expenses or transactions between related entities. The BEA estimates that collecting the relevant data will take an average of 144 hours. This form will generally have to be completed by a person with detailed knowledge of the business operations.
The five year benchmark surveys originally were due by May 29, 2015 (fewer than 50 forms) or June 30, 2015 (50 or more forms), depending on the type of U.S. Reporter. However, to reiterate, the BEA has granted a blanket extension for new filers until June 30, 2015 to submit the completed surveys. Extremely important to note is that the report is due regardless of whether it is received by a U.S. Reporter from the BEA.
If you have any questions regarding this alert or would like to engage us to assist in preparing or completing the survey, please contact a member of the International Tax Services Group at Citrin Cooperman.