5472 Instructions for Form 5472

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Instructions for Form 5472

Department of the Treasury
Internal Revenue Service

(Rev. December 2018)

Information Return of a 25% Foreign-Owned U.S. Corporation
or a Foreign Corporation Engaged in a U.S. Trade or Business

DRAFT AS OF
September 10, 2018
Section references are to the Internal Revenue
Code unless otherwise noted.

General Instructions

Future Developments

Purpose of Form

What's New

Definitions

Tax on base erosion payments of taxpayers with substantial gross receipts.
P.L. 115-97, enacted on December 22,
2017, added section 59A, Tax on Base
Erosion Payments of Taxpayers with
Substantial Gross Receipts, to the Internal
Revenue Code of 1986. New section 59A
imposes on each applicable taxpayer a
tax equal to the base erosion minimum tax
amount for the tax year. Section 59A
applies to base erosion payments paid or
accrued in tax years beginning after
December 31, 2017.

Reporting corporation. A reporting
corporation is either:
A 25% foreign-owned U.S. corporation
(including a foreign-owned U.S.
disregarded entity (DE)), or
A foreign corporation engaged in a
trade or business within the United States.

For the latest information about
developments related to Form 5472 and
its instructions, such as legislation
enacted after they were published, go to
IRS.gov/Form5472.

Reporting requirements and penalties.
P.L. 115-97 also expanded the information
reporting requirements under section
6038A and increased the amount of the
penalty for failure to furnish information or
maintain records under sections 6038A(d)
(1) and 6038A(d)(2) from $10,000 to
$25,000. See Penalties, later.
Foreign-derived intangible income.
P.L. 115-97 added section 250, which
allows a domestic corporation a deduction
for the eligible percentage of
foreign-derived intangible income (FDII)
and global intangible low-tax income
(GILTI). Section 250 is effective for tax
years beginning after December 31, 2017.
Lines 6a–6d were added to Form 5472,
Part VII, to identify transactions that qualify
for foreign-derived deduction eligible
income (FDDEI) for a domestic
corporation. See section 250 for more
information.
Part VII, lines 5a and 5b. Under section
267A, a deduction for certain interest or a
royalty paid or accrued to a related party
according to a hybrid transaction or by, or
to, a hybrid entity may be disallowed to the
extent the related party, under its tax laws,
does not include the amount in income or
is allowed a deduction with respect to the
amount.
Foreign taxpayer identifying number
(FTIN). In Part III, box 1b(3) was added
for an FTIN.
Sep 04, 2018

Use Form 5472 to provide information
required under sections 6038A and 6038C
when reportable transactions occur during
the tax year of a reporting corporation with
a foreign or domestic-related party.

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.
25% foreign shareholder. Generally,
a foreign person (defined later) is a 25%
foreign shareholder if the person owns,
directly or indirectly, at least 25% of either:
The total voting power of all classes of
stock entitled to vote, or
The total value of all classes of stock of
the corporation.
The constructive ownership rules of
section 318 apply with the following
modifications to determine if a corporation
is 25% foreign owned. Substitute “10%”
for “50%” in section 318(a)(2)(C). Do not
apply sections 318(a)(3)(A), (B), and (C),
so as to consider a U.S. person as owning
stock that is owned by a foreign person.
Direct 25% foreign shareholder. A
foreign person is a direct 25% foreign
shareholder if it owns directly at least 25%
of the stock of the reporting corporation by
vote or value.
Ultimate indirect 25% foreign
shareholder. An ultimate indirect 25%
foreign shareholder is a 25% foreign
shareholder whose ownership of stock of
the reporting corporation is not attributed
(under the principles of sections 958(a)(1)
and (2)) to any other 25% foreign
shareholder. See Rev. Proc. 91-55,
1991-2 C.B. 784.
Related party. A related party is:
Any direct or indirect 25% foreign
shareholder of the reporting corporation,

Cat. No. 59641T

Any person who is related (within the
meaning of section 267(b) or 707(b)(1)) to
the reporting corporation,
Any person who is related (within the
meaning of section 267(b) or 707(b)(1)) to
a 25% foreign shareholder of the reporting
corporation, or
Any other person who is related to the
reporting corporation within the meaning
of section 482 and the related regulations.
“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 above.

Reportable transaction. A reportable
transaction is:
Any type of transaction listed in Part IV
(for example, sales, rents, etc.) for which
monetary consideration (including U.S.
and foreign currency) was the sole
consideration paid or received during the
reporting corporation’s tax year; or
Any transaction or group of transactions
listed in Part IV, if:
1. Any part of the consideration paid
or received was not monetary
consideration, or
2. Less than full consideration was
paid or received.
Transactions with a U.S. related party,
however, are not required to be
specifically identified in Parts IV and VI.
Foreign person. A foreign person is:
An individual who is not a citizen or
resident of the United States;
An individual who is a citizen or resident
of a U.S. possession who is not otherwise
a citizen or resident of the United States;
Any partnership, association, company,
or corporation that is not created or
organized in the United States;
Any foreign estate or foreign trust
described in section 7701(a)(31); or
Any foreign government (or agency or
instrumentality thereof) to the extent that
the foreign government is engaged in the
conduct of a commercial activity as
defined in section 892.
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.

Any expense, loss, or other deduction
that is allocable or apportionable to such
income.
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.

line 1. “Foreign-owned U.S. DE” should be
written across the top of Form 7004.
The DE must fax or mail the Form 7004
to the fax number or mailing address
identified earlier, by the due date
(excluding extensions) of the return. For
these entities, do not use the regular filing
address listed in the Instructions for Form
7004.
For further general information, see the
Instructions for Form 7004.

DRAFT AS OF
September 10, 2018
Who Must File

Generally, a reporting corporation must file
Form 5472 if it had a reportable
transaction with a foreign or domestic
related party.

Exceptions from filing. A reporting
corporation is not required to file Form
5472 if any of the following apply.
1. It had no reportable transactions of
the types listed in Parts IV and VI of the
form.
2. A U.S. person that controls the
foreign related corporation files Form 5471
for the tax year to report information under
section 6038. To qualify for this exception,
the U.S. person must complete
Schedule M (Form 5471) showing all
reportable transactions between the
reporting corporation and the related party
for the tax year. This exception does not
apply to foreign-owned U.S. DEs.
3. The related corporation qualifies as
a foreign sales corporation for the tax year
and files Form 1120-FSC. This exception
does not apply to foreign-owned U.S.
DEs.
4. It is a foreign corporation that does
not have a permanent establishment in the
United States under an applicable income
tax treaty and timely files Form 8833.
5. It is a foreign corporation all of
whose gross income is exempt from
taxation under section 883 and it timely
and fully complies with the reporting
requirements of sections 883 and 887.
6. Both the reporting corporation and
the related party are not U.S. persons as
defined in section 7701(a)(30) and the
transactions will not generate in any tax
year:
Gross income from sources within the
United States or income effectively
connected, or treated as effectively
connected, with the conduct of a trade or
business within the United States; or

Note. A member is not required to join in
filing a consolidated Form 5472 just
because the other members of the group
choose to file one or more Forms 5472 on
a consolidated basis.

When and Where To File

Attach Form 5472 to the reporting
corporation's income tax return by the due
date (including extensions) of the return. A
separate Form 5472 must be filed for each
foreign or domestic-related party with
which the reporting corporation had a
reportable transaction during the tax year.
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 the return.
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.
“Foreign-owned U.S. DE” should be
written across the top of Form 1120 with
Form 5472 attached. Attach Form(s) 5472
to Form 1120 and file these forms by:
Fax (300 DPI or higher) to
855-887-7737, or
Mail to:
Internal Revenue Service
201 West Rivercenter Blvd.
PIN Unit, Stop 97
Covington, KY 41011
Extension of time to file. A
foreign-owned U.S. DE required to file
Form 5472 can request an extension of
time to file by filing Form 7004. The DE
must file Form 7004 by the regular due
date of the return. Because the Form 5472
of a DE must be attached to a pro forma
Form 1120, the code for Form 1120
should be entered on Form 7004, Part I,
-2-

Electronic Filing
of Form 5472

If you file your income tax return
electronically, see the instructions for your
income tax return for general information
about electronic filing.

If you are a foreign-owned U.S.
DE, you cannot file Form 5472
CAUTION electronically. See Foreign-owned
U.S. DEs under When and Where To File,
for acceptable methods of filing.

!

Accrued Payments
and Receipts

A reporting corporation that uses an
accrual method of accounting must use
accrued payments and accrued receipts
for purposes of computing the total
amount to enter on each line of Form
5472. See Regulations section
1.6038A-2(b)(8).

Penalties
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.
Note. Filing a substantially incomplete
Form 5472 constitutes a failure to file
Form 5472.
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.

Instructions for Form 5472 (12-2018)

Record Maintenance
Requirements

A reporting corporation must keep the
permanent books of account or records as
required by section 6001. These books
must be sufficient to establish the
correctness of the reporting corporation’s
federal income tax return, including
information or records that might be
relevant to determine the correct
treatment of transactions with related
parties. See Regulations section
1.6038A-3 for more detailed information.
Also, see Regulations sections
1.6038A-1(h) and 1.6038A-1(i) for special
rules that apply to small corporations and
reporting corporations with related party
transactions of de minimis value.

Line 1h. Enter the total value in U.S.
dollars of all foreign-related party
transactions reported in Parts IV and VI 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.

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 ten years.
Lines 1b(1), 2b(1), 3b(1), and 4b(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 or a
taxpayer identification number issued by
the IRS. All other entities should enter an
EIN.

DRAFT AS OF
September 10, 2018
Specific Instructions

Part I
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.
Foreign address. Enter the
information in the following order: city,
province or state, and country. Follow the
country’s practice for entering the postal
code, if any. Do not abbreviate the country
name.
Line 1c. Total assets. Domestic
reporting corporations enter the total
assets from item D, page 1, Form 1120.
Foreign reporting corporations enter the
amount from line 17, column (d),
Schedule L, Form 1120-F.
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 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 of
this Form 5472. This is the total of the
amounts entered on lines 13 and 26 of
Part IV plus the fair market value 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 each 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.
Instructions for Form 5472 (12-2018)

Line 1m. 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 2c, 3c, 4c, Part II,
and line 1f, Part III.
Line 2. For purposes of this line:
“Foreign person” has the same
meaning as provided earlier under
Definitions.
50% direct or indirect ownership is
determined by applying the constructive
ownership rules of section 318 with the
modifications listed under the definition of
25% foreign shareholder, earlier.
Line 3. Check this box if you are a
foreign-owned U.S. DE.

Part II

Note. Only 25% foreign-owned U.S.
corporations, including foreign-owned
U.S. DEs, complete Part II. For a
foreign-owned U.S. DE, report the
information for the foreign owner on the
lines provided for the 25% foreign
shareholder.
The form provides sufficient space to
report information for two direct 25%
foreign shareholders and two ultimate
indirect 25% foreign shareholders. If more
space is needed, show the information
requested in Part II on an attached sheet.
Report on lines 1a through 1e
information about the direct 25% foreign
shareholder who owns (by vote or value)
the largest percentage of the stock of the
U.S. reporting corporation.
Report on lines 2a through 2e
information about the direct 25% foreign
shareholder who owns (by vote or value)
the second-largest percentage of the
stock of the U.S. reporting corporation.
Report on lines 3a through 3e
information about the ultimate indirect
25% foreign shareholder who owns (by
vote or value) the largest percentage of
the stock of the U.S. reporting corporation.
Report on lines 4a through 4e
information about the ultimate indirect
25% foreign shareholder who owns (by
vote or value) the second-largest
percentage of the stock of the U.S.
reporting corporation.
-3-

Lines 1b(2), 2b(2), 3b(2), and 4b(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 1b(1), 2b(1), 3b(1), or 4b(1)).
However, filers are permitted to enter both
an EIN and a reference ID number. If
applicable, enter the reference ID number
(defined below) you have assigned to the
25% foreign shareholder.

Reference ID number. A reference ID
number is a number established by or on
behalf of the reporting corporation
identified in Part I that is assigned to 25%
foreign shareholders and/or related
foreign parties with respect to which Form
5472 reporting is required. These
numbers are used to uniquely identify the
25% foreign shareholder or related foreign
party in order to keep track of such foreign
person from tax year to tax year. The
reference ID number must meet the
requirements set forth below.
Note. Because reference ID numbers are
established by or on behalf of the
reporting corporation filing Form 5472,
there is no need to apply to the IRS to
request a reference ID number or for
permission to use these numbers.
Requirements. The reference ID
number that is entered must be
alphanumeric (defined below), and no
special characters or spaces are
permitted. The length of a given reference
ID number is limited to 50 characters.
For these purposes, the term
“alphanumeric” means the entry can be
alphabetical, numeric, or any combination
of the two.
The same reference ID number must
be used consistently from tax year to tax
year with respect to a given 25% foreign
shareholder or related foreign party. If for
any reason a reference ID number falls out
of use (for example, the 25% foreign
shareholder or related foreign party no
longer exists due to disposition or
liquidation), the reference ID number used
for such foreign person cannot be used

again for another 25% foreign shareholder
or related foreign party for purposes of
Form 5472 reporting.
There are some situations that warrant
correlation of a new reference ID number
with a previous reference ID number when
assigning a new reference ID number to a
25% foreign shareholder or related foreign
party.
For example, in the case of a merger or
acquisition involving a 25% foreign
shareholder or related foreign party, a
Form 5472 filer must use a reference ID
number which correlates the previous
reference ID number with the new
reference ID number assigned to the 25%
foreign shareholder or related foreign
party.
In the case of an entity classification
election that is made on behalf of a 25%
foreign shareholder or related foreign
party on Form 8832, Regulations section
301.6109-1(b)(2)(v) requires the 25%
foreign shareholder or related foreign
party to have an EIN for this election. For
the first tax year that Form 5472 is filed
after an entity classification election is
made on behalf of the 25% foreign
shareholder or related foreign party on
Form 8832, the new EIN must be entered
in the applicable entry space in Part II or
Part III and the old reference ID number
must be entered in the applicable entry
space just below. In subsequent years, the
Form 5472 filer may continue to enter both
the EIN and the reference ID number, but
must enter at least the EIN.
You must correlate the reference ID
numbers as follows.
New reference ID number [space] Old
reference ID number.
If there is more than one old reference
ID number, you must enter a space
between each such number.
As indicated above, the length of a
given reference ID number is limited to 50
characters and each number must be
alphanumeric and no special characters
are permitted.

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

related foreign party must be entered in
Part IV.
Reasonable estimates. When actual
amounts are not determinable, enter
reasonable estimates (see below) 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.

DRAFT AS OF
September 10, 2018

Note. This correlation requirement
applies only to the first year the new
reference ID number is used.
Lines 1b(3), 2b(3), 3b(3), and 4b(3). A
foreign-owned U.S. DE must enter an
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.

Lines 3a–3e and lines 4a–4e. Attach an
explanation of the attribution of ownership.
See Rev. Proc. 91-55, and Regulations
section 1.6038A-1(e).

Part III

All filers must complete Part III even if the
related party has been identified in Part II
as a 25% foreign shareholder. Report in
Part III information about the related party
(domestic or foreign) with which the
reporting corporation had reportable
transactions during the tax year.

Line 1b(1). Enter the related party's U.S.
identifying number, if any. Individuals
should enter a social security number or a
taxpayer identification number issued by
the IRS. All other entities should enter an
EIN.
Line 1b(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 1b(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.

Part IV
Note. Do not complete Part IV for
transactions with a domestic related party.
When completing Part IV or Part VI, the
terms “paid” and “received” include
accrued payments and accrued receipts.
State all amounts in U.S. dollars and
attach a schedule showing the exchange
rates used.
If the related party transactions occur
between a related party and a partnership
that is, in whole or in part, owned by a
reporting corporation, the reporting
corporation reports only the percentage of
the value of the transaction(s) equal to the
percentage of its partnership interest. This
rule does not apply if the reporting
corporation owns a less-than-25% interest
in the partnership. The rules of attribution
apply when determining the reporting
corporation’s percentage of partnership
interest.
Generally, all reportable transactions
between the reporting corporation and a
-4-

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 3 and 16. 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).
The corporation is required to complete
both lines only if the corporation provides
a platform contribution to other controlled
participants and is required to make
platform contribution transaction
payments to other controlled participants
that provide a platform contribution to
other controlled cost-sharing arrangement
participants.
Note. The term “platform contribution
transaction” is not limited to transactions
that occurred on or after January 5, 2009,
or transactions that occur according to a
cost-sharing arrangement that was not in
effect before January 5, 2009. See
Regulations sections 1.482-7(m)(1) and
2(i).
Lines 4 and 17. Report on these lines
cost-sharing 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)(i). The
corporation is required to complete line 4
only if the corporation itself incurred
intangible development costs. If the
corporation does not itself incur intangible
development costs, then it should only
report cost-sharing transaction payments
made on line 17.
Note. The term “cost-sharing transaction”
is not limited to transactions that occurred
on or after January 5, 2009, or
transactions that occur according to a
cost-sharing arrangement that was not in
effect before January 5, 2009. See
Instructions for Form 5472 (12-2018)

Regulations sections 1.482-7(m)(1) and
2(i).
Line 9. Amounts borrowed. Report
amounts borrowed using either the
outstanding balance method or the
monthly average method. If the
outstanding balance method is used, enter
the beginning and ending outstanding
balance for the tax year on lines 9a and
9b. If the monthly average method is used,
skip line 9a and enter the monthly average
for the tax year on line 9b.

Part VI
Note. Do not complete Part VI for
transactions with a domestic related party.
If the related party is a foreign person,
the reporting corporation must attach a
schedule describing each reportable
transaction, or group of reportable
transactions. The description must include
sufficient information so that the nature
and approximate monetary value of the
transaction or group of transactions can
be determined. The schedule should
include:
1. A description of all property
(including monetary consideration), rights,
or obligations transferred from the
reporting corporation to the foreign-related
party and from the foreign-related party to
the reporting corporation;
2. A description of all services
performed by the reporting corporation for
the foreign-related party and by the
foreign-related party for the reporting
corporation; and
3. A reasonable estimate of the fair
market value of all properties and services
exchanged, if possible, or some other
reasonable indicator of value.

deduction with respect to the amount.
However, the deduction is not disallowed
to the extent the amount is included in the
gross income of a U.S. shareholder under
section 951(a). For definitions of terms,
see section 267A.
Lines 6a–6d. Check the “Yes” box if the
filer of this Form 5472 is claiming a
deduction under section 250 with respect
to FDII derived from transactions
described in Part IV and enter the
amounts included in Part IV on lines 6b,
through 6d. State all amounts in U.S.
dollars and attach a schedule showing the
exchange rates used. If no deduction is
being claimed with respect to such
transactions, check the “No” box.
See Form 8993 and its instructions for
information on the section 250 deduction.

DRAFT AS OF
September 10, 2018
Line 12. Other amounts received.
Enter amounts received that are not
specifically reported on lines 1 through 11.
Include amounts on line 12 to the extent
that these amounts are taken into account
in determining the taxable income of the
reporting corporation.

Line 22. Amounts loaned. Report the
amounts loaned using either the
outstanding balance method or the
monthly average method. If the
outstanding balance method is used, enter
the beginning and ending outstanding
balance for the tax year on lines 22a and
22b. If the monthly average method is
used, skip line 22a and enter the monthly
average for the tax year on line 22b.
Line 23. 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, Limitation on Business Interest
Expense IRC 163(j). 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 25. Other amounts paid. Enter
amounts paid that are not specifically
reported on lines 14 through 24. Include
amounts on line 25 to the extent that these
amounts are taken into account in
determining the taxable income of the
reporting corporation.

Part V

You must check the box in Part V if you
are a foreign-owned DE that had any other
transaction as defined by Regulations
section 1.482-1(i)(7) not already entered
in Part IV. These transactions include
amounts paid or received in connection
with the formation, dissolution, acquisition,
and disposition of the entity, including
contributions to and distributions from the
entity. Describe these on an attached
statement.

Instructions for Form 5472 (12-2018)

If the entire consideration received for
any transaction includes both tangible and
intangible property and the consideration
paid is solely monetary consideration,
report the transaction in Part IV instead of
Part VI if the intangible property was
related and incidental to the transfer of the
tangible property (for example, a right to
warranty services).
See the instructions for Part IV for
information on reasonable estimates and
small amounts.

Part VII

!

CAUTION

All reporting corporations must
complete the additional
information in Part VII.

Lines 5a and 5b. Section 267A disallows
a deduction for certain interest and royalty
payments or accruals. In general, section
267A applies when:
The interest or royalty is paid or
accrued to a related party,
Under its tax laws, the related party
either:
1. Does not include the full amount in
income, or
2. Is allowed a deduction with respect
to the amount.
The amount is paid or accrued pursuant
to a hybrid transaction or by, or to, a
hybrid entity.
When section 267A applies, the
deduction is generally disallowed to the
extent the related party does not include
the amount in income or is allowed a
-5-

Part VIII

Line 1. 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
U.S. deduction is allowed under Chapter 1
of the Code. See section 59A(d)(1).
Base erosion payments also include
amounts paid or accrued by the reporting
corporation to the foreign related party in
connection with the acquisition of
depreciable or amortizable property
(section 59A(d)(2)), certain reinsurance
payments (section 59A(d)(3)), and certain
payments relating to expatriated entities
(section 59A(d)(4)).
Line 2. Enter the amount of base erosion
tax benefits of the reporting corporation (if
any). The term base erosion tax benefit
generally means any U.S. deduction
which is allowed under Chapter 1 for the
taxable year with respect to any base
erosion payment. See sections 59A(c)(2)
(A) and 59A(c)(2)(B) 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 certain reductions
in gross receipts with respect to certain
expatriated entities described in section
59A(d)(4).
Line 3. 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:
Recognizes gain or loss as if such
derivative were sold for its fair market
value on the last business day of the
taxable year (and such additional times);

Treats any gain or loss so recognized
as ordinary; and
Treats the character of all items of
income, deduction, gain, or loss with
respect to a payment according to the
derivative as ordinary.
A qualified derivative payment is not a
base erosion payment or a base erosion
tax benefit and should not be included on
Part VIII, lines 1 and 2. See section 59A(h)
for further details.

the information. We need it to ensure that
you are complying with these laws and to
allow us to figure and collect the right
amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records relating
to a form or its instructions must be
retained as long as their contents may
become material in the administration of
any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.

1545-0123. The estimated burden for all
other taxpayers who file this form is shown
below.
Recordkeeping . . . . . .

17 hr., 42 min.

Learning about the law
or the form . . . . . . . . .

3 hr., 4 min.

Preparing and sending
the form to the IRS . . .

3 hr., 30 min.

DRAFT AS OF
September 10, 2018
Note. A reporting corporation will be
treated as meeting the reporting
requirement of section 59A(h)(2)(B) by
entering an amount on line 3.

Paperwork Reduction Act Notice. We
ask for the information on this form to carry
out the Internal Revenue laws of the
United States. You are required to give us

The time needed to complete and file
this form will vary depending on individual
circumstances. The estimated burden for
business taxpayers filing this form is
approved under OMB control number

-6-

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler,
we would be happy to hear from you. See
the instructions for the tax return with
which this form is filed.

Instructions for Form 5472 (12-2018)