Your high-net-worth clients—especially relatively new investors in foreign interests—might soon have a tax-filing deadline they don’t even know about.

The U.S. Bureau of Economic Analysis (BEA) conducts surveys to collect data on foreign direct investment in the U.S., as well as on U.S. investment abroad. American taxpayers who control at least 10% or more of ownership interests in a foreign business must file a mandatory benchmark survey called Form BE-10. The same applies to those with an equivalent interest in an unincorporated foreign business enterprise (such as a partnership) during the 2019 fiscal year.

The next filing deadline is May 29. The BE-10 survey is required only every five years, and participation is mandatory.

“Five years ago it was quite a surprise to the tax professional community,” according a recent post on the blog “Taxable Tax.” “Adding to the fun last time was that the [BEA] was completely unprepared for the volume of reports. There were major issues with filing.”

The BEA webpage on the BE-10 isn’t fully ready (for example, the link to getting on their mailing list for updates recently wasn’t working). “But any tax professional who deals with this should bookmark this page and discuss this with clients,” the blog noted.

“I’m confident that not all high-net-worth clients are aware of foreign reporting requirements, whether BEA or otherwise,” said Steve Aucamp, managing director at Tiedemann Advisors in Washington, D.C.

The survey may require filing additional forms. Among them, a BE-10B is needed if the foreign affiliate is majority-owned by one or more U.S. persons (i.e., the ownership interests of all U.S. parents of the foreign affiliate exceed 50%), and if for the filer’s fiscal year ended in 2019 any of the following was greater than $80 million (positive or negative): total gross assets; sales or gross operating revenues, excluding sales taxes; or net income after provision for U.S. income taxes.

Form BE-10C must be completed by a majority-owned foreign affiliate if any of the above items was between $25 million and $80 million (positive or negative) for the fiscal year ended in 2019, or by a minority-owned foreign affiliate if any of the above exceeded $25 million (positive or negative) for that period. BE-10D is for foreign affiliates if none of the three items was greater than $25 million.

Data from the BEA surveys contribute to economic statistics and help answer which countries get the most direct investment from U.S. parent companies and which industries U.S. companies invest in abroad.

There are some exceptions to reporting. “For example, investments in foreign affiliates that are considered private funds and display characteristics of portfolio investments are not covered by Form BE-10, although these are subject to the reporting requirements of U.S. Treasury,” Aucamp said. The operating companies owned by such private funds remain subject to the BEA requirements.

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