Pursuant to the requirements of the International Investment and Trade in Services Survey Act and related statutes, the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) collects information on international trade in services, foreign direct investment in the United States, and outbound U.S. investment overseas.
BEA uses this information to compile a number of different economic and statistical reports that are, in turn, used for budgetary purposes and to help set U.S. economic and monetary policy. Information submitted to BEA is confidential and is to be used for such economic and statistical reporting purposes only.
The BEA recently imposed new filing requirements on U.S. persons with foreign affiliates by mandating Form BE-10 filings by certain U.S. persons once every five years. These forms were previously required only if a U.S. person was contacted directly by the BEA.
Under the new rules, any U.S. person who had direct or indirect ownership or control of 10 percent or more of the voting stock of an incorporated foreign business enterprise (or an equivalent interest in an unincorporated foreign business enterprise or partnership), including a branch, at any time during the U.S. person’s 2014 fiscal year is subject to the reporting requirements. A U.S. person is defined to include individuals, trusts, estates, partnerships, corporations, or other organizations (including private funds) that are resident in or subject to U.S. jurisdiction.
This law, which was changed in 2014, is applicable to ‘US trusts with offshore entities, even if the trust is not a US trust for tax purposes. Under this legislation, trusts, corporations and partnerships or LLCs, will have to abide by these rules regardless of their US tax classification.
Generally, U.S. persons are required to file Form BE-10 by May 29, 2015 if fewer than 50 responses (i.e., typically one response per foreign affiliate) are required. U.S. persons may apply for an extension of time to file until June 30, 2015. Responses to Form BE-10 are due by June 30, 2015 for U.S. persons filing 50 or more such responses.
Form BE-10 can be filed by mail, fax or online.
Failure to file a Form BE-10 can result in civil penalties of $2,500 to $25,000. In addition, willful failure to file can result in a penalty of $10,000, and, in the case of an individual, possible imprisonment for not more than one year, or both.
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Original Post By: Ronald Marini