In November 2014, the Bureau of Economic Analysis (BEA) updated the filing requirements related to their Benchmark Survey, the BE-10 Survey.  It is now mandatory for U.S. companies that own a foreign affiliate (had direct or indirect ownership of at least 10 percent of the voting stock) to complete the survey.

This survey is done every five years from US companies with both large and small foreign affiliates.  The survey is mandatory and confidential and there are penalties for not reporting.  The penalties for failure to report range from $2,500 to $25,000.  Willful failure to report results in fines not more than $10,000 and, if such failure is by an individual (including an officer, director, employee, or agent of any corporation), the individual may be imprisoned for not more than one year.  The survey collects financial data as well as operational data, and produces statistics on US direct investment abroad.  These statistics are available in detail by country and by industry on the BEA website.

BE-10A is filed for the U.S. parent company and BE-10B, BE-10C, or BE-10D is filed for each foreign affiliate depending on whether the U.S. Reporter has majority (>50%) or minority (between 10% and 50%) ownership of the foreign affiliate and on the size of the affiliate.  The 2014 survey is due May 29, 2015 for a U.S. Reporter filing fewer than 50 forms of BE-10B, BE-10C, and BE-10D.  The survey is due June 30, 2015 for a U.S. Reporter filing more than 50 forms of BE-10B, BE-10C, and BE-10D.  A request for extension can be filed by completing the Request for Extension form no later than the original due date.

The forms can be e-filed at www.bea.gov/efile.  They can also be paper filed at the addresses found on the front of the survey forms.  If a U.S. person was notified by the BEA about the need to file the survey but did not have foreign affiliates during its 2014 fiscal year, the Claim for Not Filing form can be filled out by the due date of the form.

For additional information, visit www.bea.gov/dia.

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The Chinese Tax Authority issued a new policy on accelerated depreciation of fixed assets to promote technology innovation and economic development in China (Circular 75).  This policy expands the scope of fixed assets that are eligible for accelerated depreciation methods for corporate income tax (CIT) deduction purposes.  This new policy allows manufacturing companies to accelerate cash flow through shorter fixed asset depreciation periods and encourages increased manufacturing investments in specific industries.

The new policy outlines key conditions for the accelerated depreciation and lump sum methods depreciation. Overall, the new policy will not change the total tax deduction of fixed assets investments.  However, it can benefit start-up or middle-sized enterprises in the early stages of development through increasing after-tax cash flows. The rules encourage six specific high-technology industries, including: 

  • Biopharmaceutical industry
  • Manufacturing of special machinery
  • Manufacturing of transportation equipment for the railway, shipping, aviation, and aerospace industries
  • Manufacturing of computers, telecommunications, or other electronic devices
  • Manufacturing of instruments and meters
  • Information transmission, software, and information technology services

Manufacturing companies that are planning to acquire additional equipment in China are encouraged to contact us to review their financial investment plans to determine if they can benefit from this new tax deduction policy. Please contact us for additional information.

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New Joint Initiative – U.S. & Canada to Share Information on Individuals Crossing the Border

November 18, 2014

The United States and Canada recently announced an initiative to track individuals crossing the border for both work and for personal reasons. The initiative will track the number of days a resident of one country works or stays in the other country during a calendar year. The foreign individual will have their days in Canada […]

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China Tax Authority – Outbound Payments Under the Spotlight

November 13, 2014

The Chinese tax authorities have enhanced their efforts to monitor intra-group outbound service payments and royalty charges. In July 2014, the highest tax authority in China, the State Administration of Taxation (SAT), released the “Notice of Anti-Avoidance Examination on Significant Outbound Payments.” In this notice, the SAT instructs the local tax bureaus to launch comprehensive […]

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Straight Talk on Inversions

October 31, 2014

The corporate structuring transaction known as an “inversion” has been front and center recently regarding U.S. corporate tax policy. Corporate inversions typically involve the acquisition of a U.S. corporation by a foreign corporation, during which the U.S. corporation’s shareholders acquire a majority interest in the “acquiring” foreign corporation. The transaction benefits corporate groups that earn […]

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Straight Talk on Inversions

October 10, 2014

The corporate structuring transaction known as an “inversion” has been front and center recently regarding U.S. corporate tax policy. Corporate inversions typically involve the acquisition of a U.S. corporation by a foreign corporation, during which the U.S. corporation’s shareholders acquire a majority interest in the “acquiring” foreign corporation. Read more at plantemoran.com. If you have […]

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Additional Guidance Related to Preparation of the Report of Foreign Bank and Financial Accounts (Form 114)

September 5, 2014

The foreign bank and financial account reporting rules require anyone with signature authority over a reportable foreign bank account to complete and file Form 114. Many times, an entity that has a reportable foreign bank account will have an employee that has signature authority over the foreign account. Such employees are required to submit their […]

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Importance of Post‐Merger Integration

July 17, 2014

“Going global” is one of the key focuses for many companies nowadays. Accordingly, cross-border mergers and acquisitions (M&A) has been on the rise, and the trend is expected to continue. Considering post‐merger integration (PMI) plans during the M&A process is as important as considering purchase pricing and financial risks. PMI encompasses everything from financial reporting […]

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IRS Announces Revisions to Its Offshore Voluntary Disclosure Program

July 2, 2014

Oops! The IRS Did It Again! OVDP-2014 Announced The IRS does not seem to be able to leave well enough alone for more than a year or two at a time.  While the last change, in 2012, is only a couple of years old, the IRS announced new revisions that took effect on July 1, […]

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2014 Double Eagle Awards Dinner

May 22, 2014

Each year the U.S.-Mexico Chamber of Commerce hosts a Double Eagle Awards Dinner. The purpose of this dinner is to honor a group of private sector companies and a public sector individual with its Double Eagle Awards. The award criteria are based on a company’s commitment and initiatives to build a stronger relationship between the […]

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