Every 5 years, the Bureau of Economic Analysis (the “BEA”) requires owners of offshore companies to complete its BE-10 Survey form. That time has come once again. If you had ownership in a foreign entity on December 31, 2019, you must file the form by May 29, or by June 30 if you are required to file 50 or more forms. If you fail to file, you can be subjected to significant penalties (between $2,500-$25,000 for each non-willful violation plus injunctive relief). An extension of time to file is available in the discretion of the BEA; however, it must be requested well in advance of these filing deadlines.
The BE-10 is BEA's most comprehensive survey, in terms of both the number of companies covered and the amount of information gathered, on financial and operating data of U.S. multinational enterprises and their foreign affiliates. The survey is used to produce statistics on the scale and effects of US-owned business activities abroad.
A BE-10 report is required of any U.S. person that had a foreign affiliate – i.e., that had 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 – at the end of the U.S. person’s 2019 fiscal year.
In most cases, the BEA will have provided you with written notice of the BE-10 filing requirement. Regardless, you are required to file whether or not you were contacted by BEA. The BEA is aggressive and unrelenting in their follow up activities if you do not timely file the BE-10.
Reporting on BEA’s direct investment surveys is mandatory under the International Investment and Trade in Services Survey Act (P.L. 94–472, 90 Stat. 2059, 22 U.S.C. 3101–3108, as amended, the “Act”). The act does protect the confidentiality of the data that companies report.
The Act specifies that the survey data may only be used for statistical and analytical purposes. The BEA is prohibited from granting another agency access to the data for tax, investigative, or regulatory purposes. In addition, data reported on BEA’s surveys are not subject to Freedom of Information Act (FOIA) requests.
Form BE-10A. Form BE-10A must be filed by each U.S. person that has a foreign affiliate reportable in fiscal year 2019. Data on Form BE-10A pertain to the fully consolidated U.S. domestic business enterprise for the U.S. Reporter’s 2019 fiscal year.
Form BE-10B. The U.S. Reporter must 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. The U.S. Reporter must file Form BE-10C for:
- 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;
- 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
- 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. Reporter must file Form BE-10D for all foreign affiliates for which no one of the following 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.
Please feel free to contact DUGGAN BERTSCH if you would like our assistance in helping you determine your need to file, or to assist in completing your applicable form(s).