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BEA Reporting Requirements of CrossBorder Investments and Activities

May 11, 2015
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Could you or your business be subject to a harsh civil penalty of up to $32,500 or a year in prison for willful failure to file census reports (Forms BE-10 and BE-13 surveys) with the U.S. Bureau of Economic Analysis (“BEA”)?

The BEA, an agency of the U.S. Department of Commerce, was granted the authority to collect data via surveys: quarterly, annually and every 5 years (this benchmark survey is in lieu of the annual survey and is the most comprehensive). The BEA requires reporting by:

  1. Individuals who own at least 10%, directly or indirectly, of any foreign business enterprise;
  2. Businesses who own at least 10%, directly or indirectly, of any foreign business enterprise, including unincorporated branches; and
  3. U.S. businesses who are or become at least 10% foreign owned.

It should also be noted that there are additional reporting requirements (BE-13) for the creation of new business ventures, acquisitions, and the start of certain business expansions, when funded by foreign investment (defined to equate to 10% or more ownership or control, directly or indirectly, of the voting power of a U.S. corporation or presumably capital or profits interest of a U.S. partnership). Affected U.S. business enterprises must file the report within 45 days after the event.

The information requested by these surveys is usually NOT found in financial statements, and often involve: plant or equipment expenditures, employment statistics, research and development expenses or transactions between related entities. The BEA estimates that collecting the relevant data will take an average of 144 hours. 

The five year benchmark surveys are due by May 29, 2015 (fewer than 50 forms) or June 30, 2015 (50 or more forms), depending on the type of U.S. Reporter. Extremely important to note is that the report is due regardless of whether it is received by a U.S. Reporter from the BEA.

If you have any questions regarding this alert, please contact a member of the International Tax Services Group at Citrin Cooperman.