Deadline to Comply with BE-10 Report Filing Requirements Approaches
Every five years, the Bureau of Economic Analysis (BEA) of the US Department of Commerce conducts the BE-10 Benchmark Survey of US Direct Investment Abroad. The BE-10 report is a mandatory, comprehensive survey on financial and operating data of US multinational enterprises, and it is used to produce statistics on the scale and effects of US-owned business activities abroad.
The BE-10 report must be filed by any US person (e.g., individual, branch, entity, estate, or trust) that had a foreign affiliate – that is, that had direct or indirect ownership or control of at least 10% 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 US person's 2019 fiscal year. The ownership of foreign real estate is treated as a foreign business enterprise for BE-10 reporting purposes. Certain private funds are exempt from BE-10 reporting. In some cases, no filing may be required for certain residential real property held for personal use.
There are five different types of BE-10 forms and multinational enterprises may be required to file multiple forms. The 2020 due date for BE-10 reports is May 29, 2020 for US reporters required to file fewer than 50 forms and June 30, 2020 for US reported required to file 50 or more forms. In light of the current COVID-19 pandemic, we understand that the BEA is typically granting requests for extensions to August 31, 2020, as long as such requests are received prior to the applicable due date.
In certain multi-tiered structures, simply determining whether a filing obligation exists can be complicated. Failure to file a BE-10 form with the BEA can result in civil penalties of up to $48,182, and willful violations may be subject to criminal penalties of up to $10,000 and one year in prison. Steptoe can assist in determining whether clients have a BE-10 reporting requirement, requesting an extension, and preparing any necessary BE-10 forms.
The BEA conducts an analogous (though not identical) benchmark survey on foreign direct investment in the United States (the "BE-12 Benchmark Survey of Foreign Direct Investment in the United States"). The BE-12 survey is also conducted every five years, with the next set of BE-12 reports due in 2023. Persons required to file BE-10 or BE-12 reports may also have quarterly and annual BEA reporting requirements. Steptoe can assist clients in complying with these reporting requirements as well. For more information contact a member of our Private Client Services group.