Reporting corporation.

A reporting corporation is either:

25% foreign owned.

A corporation is 25% foreign owned if it has at least one direct or indirect 25% foreign shareholder at any time during the tax year.

Related party.

A related party is:

“Related party” does not include any corporation filing a consolidated federal income tax return with the reporting corporation.

The rules in section 318 apply to the definition of related party with the modifications listed under the definition of 25% foreign shareholder, earlier.

Reportable transaction.

A reportable transaction is:

Transactions with a U.S. related party, however, are not required to be specifically identified in Parts IV, V, and VI.

Foreign person.

A foreign person is:

However, the term “foreign person” does not include any foreign person who consents to the filing of a joint income tax return.

Disregarded entity (DE).

A DE is an entity that is disregarded as an entity separate from its owner for U.S. income tax purposes under Regulations sections 301.7701-2 and 301.7701-3. See the instructions for Form 8832.

Foreign-owned U.S. DE.

A foreign-owned U.S. DE is a domestic DE that is wholly owned by a foreign person. For tax years beginning on or after January 1, 2017, and ending on or after December 13, 2017, a foreign-owned U.S. DE is treated as an entity separate from its owner and classified as a corporation for the limited purposes of the requirements under section 6038A that apply to 25% foreign-owned domestic corporations. See the final regulations at IRS.gov/irb/2017-03_IRB#TD-9796.

Exceptions from filing.

A reporting corporation is not required to file Form 5472 if any of the following apply.

Consolidated returns.

If a reporting corporation is a member of an affiliated group filing a consolidated income tax return, Regulations section 1.6038A-2 may be satisfied by filing a U.S. consolidated Form 5472. The common parent must attach to Form 5472 a schedule stating which members of the U.S. affiliated group are reporting corporations under section 6038A, and which of those members are joining in the consolidated filing of Form 5472. The schedule must show the name, address, and employer identification number (EIN) of each member who is including transactions on the consolidated Form 5472.

Foreign-owned U.S. DEs.

While a foreign-owned U.S. DE has no income tax return filing requirement, as a result of final regulations under section 6038A, it will now be required to file a pro forma Form 1120 with Form 5472 attached by the due date (including extensions) of that Form 1120. The only information required to be completed on Form 1120 is the name and address of the foreign-owned U.S. DE and items B and E on the first page. The foreign-owned U.S. DE has the same tax year used by its owner for U.S. tax filing requirements or, if none, the calendar year.

Penalties for failure to file Form 5472.

A penalty of $25,000 will be assessed on any reporting corporation that fails to file Form 5472 when due and in the manner prescribed. The penalty also applies for failure to maintain records as required by Regulations section 1.6038A-3.

Each member of a group of corporations filing a consolidated information return is a separate reporting corporation subject to a separate $25,000 penalty and each member is jointly and severally liable.

If the failure continues for more than 90 days after notification by the IRS, an additional penalty of $25,000 will apply. This penalty applies with respect to each related party for which a failure occurs for each 30-day period (or part of a 30-day period) during which the failure continues after the 90-day period ends.

Criminal penalties under sections 7203, 7206, and 7207 may also apply for failure to submit information or for filing false or fraudulent information.

Line 1a. Address.

Include the suite, room, or other unit number after the street address. If the post office does not deliver mail to the street address and the corporation has a P.O. box, show the box number instead.

Line 1c. Total assets.

Domestic reporting corporations enter the total assets from Form 1120, page 1, item D. Foreign reporting corporations enter the amount from Form 1120-F, Schedule L, line 17, column (d).

Lines 1d and 1e.

Enter a description of the principal business activity and enter the principal business activity code. See the Instructions for Form 1120 or the Instructions for Form 1120-F for a list of principal business activities and their associated codes.

Line 1f.

Enter the total value in U.S. dollars of all foreign related party transactions reported in Parts IV and VI (and if the reporting corporation is a foreign-owned U.S. DE, Part V) of this Form 5472. This is the total of the amounts entered on lines 22 and 36 of Part IV plus the fair market value (FMV) of the nonmonetary and less than full consideration transactions reported in Part VI. Do not complete line 1f if the reportable transaction is with a U.S. related party.

Line 1g.

File a separate Form 5472 for each foreign or U.S. person who is a related party with which the reporting corporation had a reportable transaction. Enter the total number of Forms 5472 (including this one) being filed for the tax year.

Line 1h.

Enter the total value in U.S. dollars of all foreign related party transactions reported in Parts IV and VI (and if the reporting corporation is a foreign-owned U.S. DE, Part V) of all Forms 5472 filed for the tax year. This is the total of the amounts entered on line 1f of all Forms 5472 filed for the tax year (including this one).

Line 1j.

Check the box if this is the first year the U.S. reporting corporation has filed a Form 5472.

Line 1k.

Complete Part VIII for each cost sharing arrangement (CSA) and enter the total number of Parts VIII attached to Form 5472 on line 1k.

Line 1o.

Provide the principal country(ies) where business is conducted. Do not include any country(ies) in which business is conducted solely through a subsidiary. Do not enter “worldwide” instead of listing the country(ies). These rules also apply to lines 5c, 6c, and 7c of Part II, and line 8f of Part III.

Line 2.

For purposes of this line:

Line 3.

Check this box if you are a foreign-owned U.S. DE.

Part II, heading.

Check the box if any direct or indirect 25% foreign shareholder identified in Part II is a surrogate foreign corporation, as defined in section 7874(a)(2)(B) resulting from an inversion in the current year or in the previous 10 years.

Lines 4b(1), 5b(1), 6b(1), and 7b(1).

For each 25% foreign shareholder listed in Part II, enter the shareholder's U.S. identifying number, if any. Individuals should enter a social security number (SSN), or an individual taxpayer identification number (ITIN) issued by the IRS. All other entities should enter an EIN.

Lines 4b(2), 5b(2), 6b(2), and 7b(2).

For each 25% foreign shareholder listed in Part II, enter the shareholder's reference ID number, if required. A reference ID number is required only in cases where no U.S. identifying number was entered for the shareholder on the preceding line (line 4b(1), 5b(1), 6b(1), or 7b(1), respectively). However, filers are permitted to enter both an EIN and a reference ID number. If applicable, enter the reference ID number (defined later) you have assigned to the 25% foreign shareholder.

Lines 4b(3), 5b(3), 6b(3), and 7b(3).

A foreign-owned U.S. DE must enter a foreign taxpayer identification number (FTIN), if any, for each direct and ultimate foreign owner listed in Part II. If a foreign-owned U.S. DE has, as a direct owner, a foreign DE, report that foreign DE as the direct owner. The FTIN should be used consistently on an annual basis when filing Form 5472, as an EIN or reference ID number would be used. If you do not have an FTIN, enter “None” or “N/A” in the FTIN block. If you have a U.S. identifying number and/or reference ID number, you can enter it in the appropriate block, as discussed earlier.

Filers of Form 5472, other than foreign-owned U.S. DEs, can enter an FTIN on these lines. However, they must also enter a U.S. identifying number or reference ID number on lines 4b(1)/7b(1) or 4b(2)/7b(2), respectively. If you are not a foreign-owned U.S. DE, and do not have an FTIN, leave the block blank.

Lines 6a–6e and lines 7a–7e.

Attach an explanation of the attribution of ownership. See Rev. Proc. 91-55, and Regulations section 1.6038A-1(e).

Line 8b(1).

Enter the related party's U.S. identifying number, if any. For individuals, enter an SSN, or an ITIN issued by the IRS. For all other entities, enter an EIN.

Line 8b(2).

If the related party is a foreign person, enter the related party's reference ID number, if required. A reference ID number is required only in cases where no U.S. identifying number was entered for the foreign related party on line 8b(1). However, filers are permitted to enter both an EIN and a reference ID number. If applicable, enter the reference ID number you have assigned to the foreign related party. See Reference ID number, earlier, for more information.

Reasonable estimates.

When actual amounts are not determinable, enter reasonable estimates (discussed later) of the total dollar amount of each of the categories of transactions conducted between the reporting corporation and the related person in which monetary consideration (U.S. currency or foreign currency) was the sole consideration paid or received during the tax year of the reporting corporation.

A reasonable estimate is any amount reported on Form 5472 that is at least 75% but not more than 125% of the actual amount required to be reported.

Small amounts.

If any actual amount in a transaction or a series of transactions between a foreign related party and the reporting corporation does not exceed a total of $50,000, the amount may be reported as “$50,000 or less.”

Lines 11 and 25.

Report on these lines platform contribution transaction payments received and paid by the reporting corporation (without giving effect to any netting of payments due and owed). See Regulations section 1.482-7(b)(1)(ii).

Lines 12 and 26.

Report on these lines cost sharing transaction payments received and paid by the reporting corporation (without giving effect to any netting of payments). See Regulations section 1.482-7(b)(1)(i). The corporation is required to complete line 12 only if the corporation itself incurred intangible development costs (IDCs). If the corporation does not itself incur IDCs, then it should only report cost sharing transaction payments made on line 26.

Line 17. Amounts borrowed.

Report amounts borrowed (including borrowings in place at the beginning of the tax year) using either the outstanding balance method or the monthly average method. If the outstanding balance method is used, enter the beginning and ending outstanding balances for the tax year on lines 17a and 17b. If the monthly average method is used, skip line 17a and enter the monthly average for the tax year on line 17b.

Line 21. Other amounts received.

Enter amounts received that are not specifically reported on lines 9 through 20. Include amounts on line 21 to the extent that these amounts are taken into account in determining the taxable income of the reporting corporation.

Line 31. Amounts loaned.

Report amounts loaned (including loans in place at the beginning of the tax year) using either the outstanding balance method or the monthly average method. If the outstanding balance method is used, enter the beginning and ending outstanding balances for the tax year on lines 31a and 31b. If the monthly average method is used, skip line 31a and enter the monthly average for the tax year on line 31b.

Line 32. Interest paid.

Report the amount of interest paid or accrued. If the amount of interest paid or accrued is subject to the limitation of section 163(j), report only the amount allowed as a deduction under that section. For more information, see the Instructions for Form 8990. Any amounts accrued or paid in excess of the amount allowed as a deduction under section 163(j) will be treated as interest paid or accrued in a subsequent year and are required to be reported on this line in the year the deferred amount is allowed as a deduction.

Line 35. Other amounts paid.

Enter amounts paid that are not specifically reported on lines 23 through 34. Include amounts on line 35 to the extent that these amounts are taken into account in determining the taxable income of the reporting corporation.

Lines 40a and 40b.

Section 267A disallows a deduction for certain interest or royalty paid or accrued pursuant to a hybrid arrangement, to the extent that, under the foreign tax law, there is not a corresponding income inclusion (including long-term deferral). Report on line 40b the total amount of interest and royalty paid or accrued by the reporting corporation (including, in the case of a reporting corporation that is a partner of a partnership, the reporting corporation’s allocable share of interest or royalty paid or accrued by the partnership) for which a deduction is disallowed under section 267A.

Lines 41a–41d.

Check the “Yes” box on line 41a if the filer of this Form 5472 is claiming a deduction under section 250 with respect to foreign-derived intangible income (FDII) derived from any transaction with the foreign related party and enter those amounts as requested on lines 41b through 41d. State all amounts in U.S. dollars and attach a schedule showing the exchange rates used. With respect to lines 41b and 41c, the term “sales” includes any lease, license, sublicense, exchange, or other disposition of property. See Regulations section 1.250(b)-3(b)(16).

If the filer of this Form 5472 is not claiming a deduction under section 250 with respect to FDII derived from any transaction with the foreign related party, check the “No” box on line 41a and skip lines 41b through 41d.

See Form 8993 and its instructions for information on the section 250 deduction.

Line 42a.

Check the “Yes” box if, during the tax year, the reporting corporation had any loans to or from the related party to which the safe-haven rate rules of Regulations section 1.482-2(a)(2)(iii)(B) are applicable, and for which the reporting corporation used a rate of interest within the relevant safe-haven range (100% to 130% of the Applicable Federal Rate (AFR) for the relevant term).

Line 42b.

Check the "Yes" box if during the tax year the reporting corporation had any loans to or from the related party to which the safe-haven rate rules of Regulations section 1.482-2(a)(2)(iii)(B) are applicable, and for which the reporting corporation used a rate of interest outside the relevant safe-haven range (100% to 130% of the AFR for the relevant term).

Line 43a.

Check the “Yes” box if the reporting corporation issued a covered debt instrument in any of the transactions described in Regulations section 1.385-3(b)(2) during the tax year with respect to a related party that is a corporation. Also check “Yes” if the reporting corporation issued or refinanced indebtedness owed to a related party that is a corporation during the 36 months before or after the date of a distribution or acquisition described in Regulations section 1.385-3(b)(3)(i) made by the reporting corporation, and either the issuance or refinance of indebtedness, or the distribution or acquisition, occurred during the tax year. Otherwise, check “No.” Apply Regulations section 1.385-3(b)(3)(iii)(E) to determine when a debt instrument is treated as issued for purposes of Regulations section 1.385-3(b)(3)(iii). Apply Regulations section 1.385-3(f) in the case of a controlled partnership within the meaning of Regulations section 1.385-1(c)(1).

Debt that the reporting corporation treats as stock pursuant to Regulations section 1.385-3 still should be included when completing line 43a.

Line 43b(1).

Provide the total amount of the transactions described in Regulations section 1.385-3(b)(2) (as measured by the FMV of the distributions or, as the case may be, of the property exchanged for the debt instruments), and of the distributions and/or acquisitions described in Regulations section 1.385-3(b)(3)(i) (as measured by the FMV of the property distributed and/or acquired).

Line 43b(2).

Provide the total amount (as measured by issue price in the case of an instrument treated as stock upon issuance, or adjusted issue price in the case of an instrument deemed exchanged for stock) of the debt instrument issuances addressed by line 43a. See Regulations sections 1.385-1(d)(1) and 1.385-3(d). The adjusted issue price of a debt instrument is the issue price increased by the amount of original issue discount previously includible in gross income of any holder and decreased by payments other than payments of qualified stated interest. See section 1272(a)(4) and Regulations section 1.1275-1(b)(1).

Line 44.

Provide a brief description of the CSA, including the industry and intangibles involved, and sufficient detail to distinguish the CSA from any other CSAs in which the reporting corporation is a controlled participant.

Line 47.

Enter the reporting corporation’s share of reasonably anticipated benefits (RAB) for the CSA during the tax year. See Regulations section 1.482-7(e) for rules on determining and updating a controlled participant’s RAB share. If the reporting corporation applied more than one RAB share during the tax year in determining its share of IDCs, enter the RAB share that was applied to IDCs incurred at the end of the year. See Regulations section 1.482-7(d) for more information on IDCs.

Lines 48b and 48c.

See Regulations section 1.482-7 for more information on determining whether stock-based compensation is directly identified with, or reasonably allocable to, the intangible development activity (IDA) under the CSA. See Regulations section 1.482-7(d)(3) and Notice 2005-99 for more information on determining the measurement and timing of stock-based compensation IDCs, including an election available with respect to options on publicly traded stock and certain other stock-based compensation. If the taxpayer made the election described in Regulations section 1.482-7(d)(3)(iii)(B) or Notice 2005-99, the taxpayer should attach a statement to Form 5472 explaining that the taxpayer made such election and include in such statement the total amount of stock-based compensation taken into account as an IDC for the tax year pursuant to such election. If the taxpayer attaches the statement described in the previous sentence, then in the entry space provided for line 48b the taxpayer should include the total amount of stock-based compensation taken into account as an IDC, including stock-based compensation pursuant to the election described above and any not subject to such election.

Check the appropriate box on line 48c to indicate whether any stock-based compensation was granted during the term of the CSA to individuals who performed functions in business activities that generate cost shared intangibles that was not treated as directly identified with, or reasonably allocable to, the IDA, as defined in Regulations section 1.482-7(d)(1)(i). This would include stock-based compensation granted in earlier years (which could give rise to deductions in the current tax year) that were not treated as identified with, or reasonably allocable to, the IDA.

Lines 49a and 49b.

For the tax year, enter the total amount of IDCs for the CSA on line 49a. See Regulations section 1.482-7(d) for more information on IDCs. On line 49b, enter the amount of IDCs allocable to the reporting corporation for the tax year based on the reporting corporation’s RAB share.

Line 50.

Enter the amount of base erosion payments made by the reporting corporation (if any). The term “base erosion payment” generally means any amount paid or accrued by the reporting corporation to a foreign person, which is a related party, and with respect to which a deduction is allowed under chapter 1 of the Code. See section 59A(d)(1) and Regulations section 1.59A-3(b)(1)(i).

Base erosion payments also include amounts paid or accrued by the reporting corporation to a foreign related party in connection with the acquisition of depreciable or amortizable property (see section 59A(d)(2) and Regulations section 1.59A-3(b)(1)(ii)), certain reinsurance payments (see section 59A(d)(3) and Regulations section 1.59A-3(b)(1)(iii)), and certain payments relating to expatriated entities (see section 59A(d)(4) and Regulations section 1.59A-3(b)(1)(iv)).

For additional information about base erosion payments, including rules for determining the amount paid or accrued, and certain exceptions, see Regulations section 1.59A-3.

Line 51.

Enter the amount of base erosion tax benefits of the reporting corporation (if any). The term “base erosion tax benefit” generally means any deduction that is allowed under chapter 1 for the tax year with respect to any base erosion payment. See sections 59A(c)(2)(A) and 59A(c)(2)(B) and Regulations section 1.59A-3(c) for further details.

The term “base erosion tax benefit” also includes certain reductions in gross premiums with respect to certain reinsurance payments described in section 59A(d)(3) and Regulations section 1.59A-3(c)(1)(iii) and certain reductions in gross receipts with respect to certain expatriated entities described in section 59A(d)(4) and Regulations section 1.59A-3(c)(1)(iv).

Line 52.

Enter the amount of qualified derivative payments made by the reporting corporation. The term “qualified derivative payment” generally means any payment made by a taxpayer according to a derivative with respect to which the taxpayer:

Determine the amount of the qualified derivative payments after combining all items of income, gain, loss, or deduction arising with respect to the position during the tax year. A qualified derivative payment is not a base erosion payment or a base erosion tax benefit and should not be included on Part IX, lines 50 and 51. See section 59A(h) and Regulations section 1.59A-6 for further details.