The Department of Commerce’s Bureau of Economic Analysis (BEA) revised its requirements for its BE-10 forms in 2014. Given the upcoming deadlines at the end of May and the data that needs to be collected in order to complete these filings, you need to be aware of the changes.

Effective December 22, 2014, the BEA’s BE-10 forms are mandatory for all U.S. persons that had direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise, including a branch—or an equivalent interest in an unincorporated foreign business enterprise—at any time during the U.S. person’s 2014 fiscal year. This filing requirement impacts a number of individuals and companies who have not had to submit these forms in the past.

Previously, only companies notified by the BEA were obligated to file the BE-10 forms. Now, persons subject to the reporting requirements of the BE-10 Survey of U.S. Direct Investment Abroad are required to respond whether or not they are contacted by the BEA. Reports are required even if the foreign business enterprise was established, acquired, seized, liquidated, sold, expropriated, or inactivated during the 2014 fiscal year. If a U.S. person contacted by the BEA had no foreign affiliates during its 2014 fiscal year, a BE-10 Claim for Not Filing must be filed.

Purpose:

The BEA collects information through the BE-10 forms every five years under the International Investment and Trade in Services Survey Act. The benchmark survey covers the universe of U.S. direct investment abroad and requires responses from persons subject to the reporting requirements, regardless of whether they have been contacted by the BEA, in order to ensure that respondents subject to the requirements for U.S. direct investment abroad are identified. The BEA uses the financial and operational data collected to produce statistics on U.S. direct investment abroad on a country-by-country and industry basis. The data collected for the U.S. person and each foreign affiliate includes assets, liabilities, total sales, net income, fiscal year end, ownership structure, products and services, and primary industry.

Due Dates/Required Filings:

• May 29, 2015 – U.S. Reporters (defined as a U.S. person—an individual or entity that resides in the U.S. or is subject to the jurisdiction of the U.S.—that had any foreign affiliates during its 2014 fiscal year) required to file fewer than 50 forms must file a fully completed and certified BE-10 report comprising Form BE-10A and Form(s) BE-10B, C, and/or D (as required).

• May 29, 2015 – U.S. persons who did not have 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—at any time during the U.S. person’s 2014 fiscal year must file a BE-10 Claim for Not Filing only if they have been contacted by the BEA for filing the BE-10 form. A U.S. person that does not meet the reporting requirements and that has not been contacted by the BEA does not have to report any BE-10 form to the BEA.

• June 30, 2015 – U.S. Reporters filing 50 or more forms must file a fully completed and certified BE-10 report comprising Form BE-10A and Form(s) BE-10B, C, and/or D (as required).

• Extensions – Extensions for filing the BE-10 forms may be granted. To request an extension to file the forms, the U.S. Reporter can call the BEA. The BEA may work with the U.S. Reporter to grant an extension based on the U.S. Reporter’s specific circumstances. Alternatively, the U.S. Reporter can complete and submit a Request for Extension for Filing the 2014 BE-10 Benchmark Survey of U.S. Direct Investment Abroad form. This form sets forth the following extension dates:

  • If the U.S. Reporter expects to file fewer than 50 forms, the U.S. Reporter can request an extension to June 30, 2015.

  • If the U.S. Reporter expects to file 50 to 100 forms, the U.S. Reporter can request an extension to July 31, 2015.

  • If the U.S. Reporter expects to file more than 100 forms, the U.S. Reporter can request an extension to August 31, 2015.

Forms:

• BE-10A – Report for U.S. Reporters. If the U.S. Reporter is a corporation, Form BE-10A is required to cover the fully consolidated U.S. domestic business enterprise (banking and nonbanking). Forms(s) BE-10B, C, and/or D also must be filed for its foreign affiliates, whether held directly or indirectly.

  • A complete Form BE-10A must be filed if the total assets, sales or gross operating revenues excluding sales taxes, or net income after provisions for U.S. income taxes are greater than $300 million (positive or negative).

  • If the total assets, sales or gross operating revenues excluding sales taxes, or net income after provisions for U.S. income taxes is $300 million or less (positive or negative), only items 1-42 and 97-114 of the form needs to be completed.

  • The U.S. Reporter must also complete a Form BE-10B, C, or D as appropriate for each foreign affiliate.

• BE-10B – Report for majority-owned direct and indirect foreign affiliates of U.S. parents with assets, sales, or net income greater than $80 million (positive or negative). Exceptions to completing certain parts of the Form BE-10B exist as discussed below.

  • If the total assets, sales or gross operating revenues excluding sales taxes, or net income after provisions for U.S. income taxes is greater than $300 million (positive or negative), Part III of the form does not have to be completed.

  • If the total assets, sales or gross operating revenues excluding sales taxes, or net income after provisions for U.S. income taxes is greater than $80 million (positive or negative) but none of these are greater than $300 million (positive or negative), Part IV of the form does not have to be completed.

• BE-10C – Report must be filed for:

  • Each majority-owned direct or indirect foreign affiliate of a U.S. Reporter with assets, sales, or net income greater than $25 million (positive or negative), but not greater than $80 million (positive or negative) at any time during the affiliates 2014 fiscal year.

  • Each minority-owned foreign affiliate of a U.S. Reporter with assets, sales, or net income greater than $25 million (positive or negative) at any time during the affiliate’s 2014 fiscal year.

  • Each foreign affiliate of a U.S. Reporter for which assets, sales, or net income were all less than $25 million (positive or negative) at any time during the affiliate’s 2014 fiscal year that is a foreign affiliate parent of another foreign affiliate being filed on Form BE-10B or C.

• BE-10D – Report for foreign affiliate(s) of a U.S. Reporter for which total assets, sales or gross operating revenues excluding sales taxes, or net income after provisions for U.S. income taxes were all less than $25 million (positive or negative) at any time during the affiliates 2014 fiscal year, and is not a foreign affiliate parent of another foreign affiliate being filed on Form BE-10B or C.

Penalties:

While the BEA has stated informally that it does not intend to penalize entities for failure to file, despite now having an obligation to do so, persistent failure to file may ultimately result in civil and criminal penalties. The BEA may pursue civil penalties of not less than $2,500 and not more than $25,000, seek injunctive relief, or both, and willful violations may result in criminal penalties of up to $10,000, imprisonment for up to one year, or both.

Confidentiality:

The data collected is confidential and may be used only for analytical or statistical purposes. It cannot be used for taxation, investigation or regulation. Copies are immune from legal process, and the BEA cannot present the information in a manner that allows it to be individually identified without the U.S. person’s prior written consent.