URGENT REPORTING REQUIREMENT FOR OWNERS OF FOREIGN ENTITIES
Posted on 06.16.15
By: Ryan Beethoven-Wilson, CPA | Tax Senior Associate
Every 5 years, the US Department of Commerce’s Bureau of Economic Analysis (BEA) conducts a “survey” via Form BE-10 requesting financial and operational data on U.S. citizens’ and companies’ direct investment abroad. Beginning with this year however, the BE-10 is no longer voluntary and there are steep civil and criminal penalties for non-compliance.
Who must file Form BE-10?
- All individuals and entities that had a foreign affiliate at any time during 2014
- An individual or company is determined to have a foreign affiliate by directly or indirectly owning at least 10% of the voting stock of a foreign corporation, a 10% interest in a partnership, or a foreign branch
What actually needs to be filed?
- Form BE–10A must be completed by a U.S. Reporter (entity or individual)
- Forms BE-10B, BE-10C, or BE-10D must be completed on behalf of foreign affiliates whether held directly or indirectly. The actual form (B, C, or D) to be filed is dependent on ownership, sales, total assets, and net income thresholds
How to file Form BE-10?
- Forms can be e-filed
- Forms can also be paper filed at the addresses on the survey forms
- If an individual or company was notified by the BEA, but no longer has foreign affiliates, then the “BE-10 Claim for Not Filing” can be completed
When are the forms due?
- All Forms BE-10 are due by June 30, 2015
Is an extension available?
- Yes, there is an extension request available at the BEA website which will extend the filing deadline until August 31, 2015
What are the penalties for noncompliance?
- Individuals and entities failing to comply are subject to civil penalties of $2,500 - $25,000 per instance
- Willful noncompliance can result in criminal penalties of up to $10,000
- Non-compliant individuals could face up to one year imprisonment, for willful failure to file
Resources, video tutorials, and FAQ’s regarding the Form BE-10 filing requirement can be found on the BEA’s website.
There are no payments, fees, etc. associated with filing Form BE-10. However due to the severity of non-compliance penalties, Form BE-10 should be filed prior to the June 30 deadline.
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Ryan works with both large and mid-market clients in the construction, real estate, manufacturing, private equity, and retail industries. He assists his clients with tax planning and saving opportunities to help their businesses grow. Ryan also participates in the Greater Richmond Chamber of Commerce’s Helping Young Professionals Engage (HYPE) program and in the Richmond Venture Forum. Read more of Ryan's insights on our blog.