The Department of Commerce has introduced a new form that is required to be filed by U.S. owners of foreign entities. The new form BE-10 is filed through the Bureau of Economic Analysis (BEA). The BE-10 is an annual survey which, up until recently, was only mandatory if the U.S. owner was contacted directly by the BEA.
Form BE-10 is normally due May 29th, but, as it has just become known that the BEA changed this to a mandatory filing, they have extended the due date to June 30th for the year ended 2014. Even though this form is only informational, the BEA can assess steep penalties for failing to file.
Who needs to file?
The threshold set by the BEA to file is a 10% direct or indirect U.S. ownership of a foreign entity. However, it is important to note that US ownership, for the purposes of this filing, is either an individual or corporation that is considered to be a resident of the U.S. and subject to its jurisdiction. Therefore, U.S. citizens who reside in a foreign country and owners of foreign entities may not be required to file this form, depending on their circumstances. Aside from this, there are no other major thresholds that could eliminate this filing requirement for a US owner.
Related read: Foreign Bank and Financial Accounts: What You Need to Know
The complexity of the reporting obligation is based on certain financial factors of the foreign entity. These financial factors are the entity’s total assets, gross operating revenues (less sales tax), and net income (loss) after provision for foreign income taxes. If none of these factors exceed $25 million, then the U.S. owner would only be subject to the least complex reporting obligation, having to file only form BE-10D, which requests items such as total assets, total liabilities, and sales, as well as form BE-10A. If any of these factors exceeds $25 million, then the reporting obligation becomes progressively more complex.
Navigating the BE-10 survey can be confusing. The Zinner team of financial and business advisors can help owners of foreign entities prepare and position your business for optimum performance. We're ready to help; contact us at 216-831-0733 or email@example.com for a no cost, no obligation consultation.