BE-10 Benchmark Survey: U.S. Direct Investment Abroad
You might be unfamiliar with this reporting deadline, and that is understandable since this reporting deadline is not yearly, but in fact, is due once every 5 years. We are referring to the Bureau of Economic Analysis’ (“BEA”) BE-10 Benchmark Survey of U.S. Direct Investment Abroad. The BE-10 benchmark survey is not a tax form, it is the BEA's most comprehensive survey, in terms of both the number of companies covered and the amount of information gathered, on U.S multinational enterprises. The survey is conducted once every 5 years in place of the BE-11 annual survey. The BE-11 annual survey is conducted during the 4 years in between benchmark surveys. Failure to file the BE-10 survey can subject the non-filer to civil penalties of between $4,735 and $48,192 for a non-willful failure to file. A willful failure to file can result in criminal penalties of up to $10,000, and up to one year in prison for an individual.
Who is required to file?
The BE-10 survey must be filed by any U.S. person with a foreign affiliate. For purposes of the BE-10, a U.S. person is any person resident in the U.S. or subject to U.S. jurisdiction. The BEA defines a foreign affiliate as having a direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise. For 2019’s filing, the relationship had to be present at the end of the U.S. person’s 2019 fiscal year. It is customary for the BEA to contact a filer who is required to file. However, reporting is required from entities subject to the reporting requirements, whether contacted by the BEA or not. Additionally, COVID-19 has reduced BEA’s capacity to contact filers by paper mail, thus, it is possible that you may receive BEA correspondence via email.
How Do I File a Complete Form BE-10?
A complete BE-10 survey includes a BE-10A Form for the U.S. parent's domestic operation and one or more BE-10B, BE-10C, or BE-10D forms for its foreign affiliates.
Form BE-10A
Each U.S. person with a foreign affiliate reportable in fiscal year 2019 must file Form BE-10A. The information on Form BE-10A relates to the fully consolidated U.S. domestic business enterprise for the U.S. Reporter’s 2019 fiscal year.
Form BE-10B
The U.S filer must also file Form BE-10B for each majority-owned foreign affiliate for which the affiliate’s total assets; sales or gross operating revenues, excluding sales taxes; or net income after provision for foreign income taxes was greater than $80 million (positive or negative) at the end of the affiliate’s 2019 fiscal year.
Form BE-10C
This Form must also be filed if any of the following applies:
(1) each majority-owned foreign affiliate for which total assets; sales or gross operating revenues, excluding sales taxes; or net income after provision for foreign income taxes was greater than $25 million (positive or negative), but for which no one of these items was greater than $80 million (positive or negative) at the end of the affiliate’s 2019 fiscal year;
(2) each minority-owned foreign affiliate for which total assets; sales or gross operating revenues, excluding sales taxes; or net income after provision for foreign income taxes was greater than $25 million (positive or negative) at the end of the affiliate’s 2019 fiscal year; and
(3) each foreign affiliate for which no one of the items: total assets; sales or gross operating revenues, excluding sales taxes; or net income after provision for foreign income taxes was greater than $25 million (positive or negative) at the end of the affiliate’s 2019 fiscal year that is a foreign affiliate parent of another foreign affiliate being filed on Forms BE-10B or BE-10C.
Form BE-10D
The U.S. filer must also file Form BE-10D for all foreign affiliates for which no one of the items: total assets; sales or gross operating revenues, excluding sales taxes; or net income after provision for foreign income taxes was greater than $25 million (positive or negative) at the end of the affiliate’s 2019 fiscal year. If, however, a foreign affiliate meeting the reporting requirements for Form BE-10D owns another foreign affiliate being filed on Form BE-10B or BE-10C, the foreign affiliate parent must be filed on Form BE-10C.
When Is the Deadline to File and How Do I File?
Fewer than 50 Forms - A U.S. filer required to file fewer than 50 Forms BE-10B, BE-10C, and/or BE-10D must file their Forms by May 29, 2020.
50 Forms or more - A U.S. filer required to file 50 or more Forms BE-10B, BE-10C, and/or BE-10D must file their Forms by June 30, 2020.
The BEA has provided an extension for the BE-10 filing deadline until August 31st. However, unlike the IRS, this extension is not automatic and must be made on an individual filer basis. Finally, the BE-10 Form may be e-filed on BEA’s website www.bea.gov/efile, or faxed to (301) 278-9502, or mailed to the BEA office.
Every situation is unique and should be evaluated individually. Barbosa Legal has a team of experienced attorneys specializing in international taxation who can properly analyze the facts of your particular situation and provide advice customized to your needs.