Tax

BEA Survey Deadlines Nearing for U.S. Parent Companies with Foreign Affiliates

May 2015

Under the authority of the International Investment and Trade in Services Survey Act (22 U.S.C. 3101 – 3108), the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce is conducting its 2014 Benchmark Survey of U.S. Direct Investment Abroad by way of BEA Form BE-10. Every five years, this mandatory survey collects data from U.S. parent companies of foreign affiliates and is designed to aid the BEA with economic statistics regarding the impact of such investment on U.S. and foreign economies. The data collected in this comprehensive survey is confidential and only may be used for analytical or statistical purposes.

The Components of Form BE-10

The BEA requires Form BE-10 to be filed by any U.S. person who had at any time during the 2014 fiscal year a foreign affiliate, i.e., had 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 that had foreign activities separable from the domestic activities of the reporting U.S. person. A complete BE-10 report includes one BE-10A form for the reporting domestic enterprise and one or more BE-10B, BE-10C or BE-10D forms for its foreign affiliates.

The “U.S. Reporter” must complete Form BE-10A, which collects survey data about the fully consolidated U.S. domestic business enterprise, meaning the U.S. business enterprise whose voting securities are not more than 50 percent owned by another U.S. business enterprise and—moving down the tiers of ownership from the initial business enterprise—any U.S. business enterprise whose voting securities are more than 50 percent owned by the U.S. business enterprise above it. This consolidation excludes foreign branches and all other foreign affiliates within the group. Information the U.S. Reporter must disclose in Form BE-10A is tied to the extent of its assets, sales or net income, whichever is greater.

Whether a Form BE-10B, BE-10C or BE-10D should be filed for a foreign affiliate is dictated by:

  • The affiliate’s degree of affiliation with the U.S. Reporter
  • The value of the affiliate’s assets, sales or net income
  • And if the foreign entity is a foreign affiliate parent or another foreign affiliate filer

In general, each foreign affiliate will file its own Form BE-10B, C or D with the BE-10 package.

Each form included in the BE-10 submission requires reporting of varying degrees of financial information, such as assets, liabilities, total sales, net income and operational data, such as fiscal year-end, ownership structure, products and services, major business activities, number of employees and employee compensation, regarding the reporting enterprises as well as information pertaining to transactions occurring between the reporting enterprises. Certain filers may electronically file Form BE-10 using BEA’s electronic filing system.  The surveys also may be submitted by fax or mailed through the U.S. Postal Service.

Due Date & Penalties

The due date for submission of Form BE-10 depends on the number of B, C and D forms the U.S. Reporter is required to file for its foreign affiliates. A U.S. Reporter filing fewer than 50 of these forms has a May 29, 2015, due date to file a fully completed and certified BE-10 Report. A U.S. Reporter filing more than 50 B, C and D forms has a filing deadline of June 30, 2015. The U.S. Reporter may request an extension of its filing deadline by submitting a BE-10 Request for Extension for Filing before its BE-10 due date.

In contrast with prior BE-10 surveys, U.S. persons with foreign affiliates must comply with BE-10 reporting requirements regardless of whether they are contacted by the BEA. Also, those contacted by the BEA about reporting must respond to the BEA inquiry by filing a completed Form BE-10 or, if applicable, submitting by May 29, 2015, either written certification that the person had no direct investment within the purview of the BE-10 survey or a BE-10 Claim for Not Filing.

Those who fail to submit a Form BE-10 will be subject to a civil penalty ranging between $2,500 and $25,000 and to injunctive relief commanding compliance, or both. And a willful failure to report may result in criminal penalties of up to $10,000 and, if an individual, imprisonment for up to one year, or both. Upon conviction, any officer, director, employee or agent of any corporation who knowingly participates in such violations may be punished by a like fine, imprisonment or both.

Please contact your BKD advisor for more information about which forms you are required to file for the BEA Benchmark Survey of U.S. Direct Investment Abroad.

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