BE-10 Foreign Entity Ownership Filing Deadline May 29!

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New May 29, 2020 Filing Requirement for all US Companies and US Individuals That Own 10% or More of a Foreign Entity

By Amy Prandi, Senior Tax Accountant

Every five years the U.S. Bureau of Economic Analysis (BEA) conducts a mandatory BE-10 Benchmark Survey of U.S. Direct Investment Abroad. The survey is used to produce statistics on the scale and effects of US-owned business activities abroad.

Generally, the BE-10 survey is required to be filed by any U.S. person that has, determined as of the end of the 2019 fiscal year, a direct or indirect ownership or control of at least 10% of the voting stock of an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise.  The definition of a U.S. person is broad and includes individuals, partnerships, estates, trusts, corporations and other organizations such as LLC’s or S Corporations that are subject to the jurisdiction of the United States.

The survey is quite extensive and detailed.  The survey requires 2019 fiscal year data related to sales, employment, financial, operating, imports and exports, investments and transactions between the U.S person and its foreign affiliates.  The International Investment and Trade in Services Survey Act protects the confidentiality of the data that companies report and is used for economic and statistical reporting purposes only.

The due date to file the survey is either May 29th, 2020 or June 30th, 2020 (depending on the number of forms required to be filed) but with approval from the BEA, the deadline in most situations can be extended until August 31, 2020.  The U.S. person must contact the BEA in advance to be granted an extension of time to file.  AN EXTENSION OF TIME TO FILE IS NOT AUTOMATIC.

Unfortunately this is not something to take lightly, the penalties for failure to file are harsh and severe. Failure to file can lead to civil penalties of between $4,735 and $48,192 and criminal penalties for willful violations of up to $10,000 and, if an individual, up to one year in prison. For more information, contact Amy Prandi aprandi@maloneynovotny.com or Joan Morgan jmorgan@maloneynovotny.com and read more at https://www.bea.gov/be-10-benchmark-survey-us-direct-investment-abroad

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