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05.04.2023 | KPMG Law Insights

BE-12 Survey: U.S. Subsidiaries May Be Reportable

The U.S. Bureau of Economic Analysis (BEA) has again launched the BE-12 Survey. This is a survey that the BEA is using to gain a detailed picture of foreign investment in the United States. To this end, statistics will be compiled that reflect the scope and impact of business activities of foreign (partially) owned U.S. subsidiaries.

Important to know: As a rule, affected companies must participate in the survey, even if they do not receive a request. This is because they are generally subject to a reporting requirement. If the notification is overlooked, penalties may be imposed.

Here is an overview of what is behind the forms and in which cases German companies must provide information:

When does the BE-12 Survey reporting requirement kick in?

Surveyed are all U.S. companies (including property held for non-personal use) in which foreign entities or individuals directly or indirectly hold a voting interest (or the equivalent) of 10% or more. Companies with relatively small holdings in the U.S. could easily overlook this.

 

Which form is the right one?

There are several forms available as part of the BE-12 survey. Which form to fill out depends primarily on the amount of assets, sales or net income. There is also a form for exemption from the obligation to register. Here’s an overview of which form is right for which company:


Form BE-12A
: for U.S. companies that have more than $300 million (positive or negative) in assets, revenues, or net income (or net losses) and are directly and/or indirectly majority-owned by foreign parent companies.

Form BE-12B: for U.S. companies that have between $60 million and $300 million (positive or negative) in assets, revenues, or net income (or net losses) and are directly and/or indirectly majority-owned by foreign parents and/or of U.S. companies that are not majority-owned by foreign parent but have more than $60 million (positive or negative) in assets, revenues, or net income (or net losses).


Form BE-12C
: for U.S. companies that have assets, sales, or net income (or net loss) of $60 million or less and are directly and/or indirectly 10% or more owned by foreign parent companies.


Form BE-12 Claim for Not Filing
: for U.S. companies that have been contacted by the BEA but are not required to report. This form must also be used if the interest in the U.S. subsidiary has fallen below 10% or it has been dissolved or liquidated before the end of the tax year.

The BEA provides a chart for delineation.

 

What else is important

For the data to be provided, the fiscal year 2022 is relevant, in exceptions the fiscal year 2021.

The deadline for submission is 05/31/2023 or 06/30/2023 if submitted electronically. Failure to report within these deadlines can result in penalties ranging from $2,500 to approximately $50,000.

The data obtained is confidential and may not be disclosed to or viewed by other authorities by law.

You can find more information here.

Together with the experts of our cooperation partner KPMG International Limited, we will be happy to advise you.

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grixen@kpmg-law.com

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