5472 Instructions for Form 5472

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Instructions for Form 5472

Department of the Treasury
Internal Revenue Service

(Rev. December 2021)

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
November 23, 2021
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments

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.

What's New

Lines renumbered. All the lines are
renumbered on the form in a sequential
order, irrespective of different parts on
the form.
New box 1k. Total numbers of Part
VIII attached to Form 5472. On
page 1, a new box 1k has been added
to request the total numbers of Part
VIII—Cost Sharing Arrangement (CSA)
attached to Form 5472.

New box 1m. Date of incorporation.
On page 1, a new box 1m has been
added to request a date of incorporation
of the foreign corporation.
Part IV, new lines 20 and 34. New
lines 20 and 34 have been added to get
additional information on loan guarantee
fees received and loan guarantee fees
paid between the reporting corporation
and the foreign related party,
respectively.
Part VII, new line 42. A new line has
been added to Part VII to discuss if
safe-haven rules were applied with
regard to any loans between the
reporting corporation and the foreign
related party.
Part VII, new line 43. A new line has
been added to Part VII to disclose any
distributions or acquisitions between the
reporting corporation and the foreign
related party and to report the amount of
such distributions or acquisitions and
the amount of such related party
indebtedness.
New Part VIII—Cost Sharing Arrangement (CSA). Part VIII—Base
Erosion Payment and Base Erosion Tax
Benefits Under Section 59A has been
renumbered to Part IX. We have added
a new part which inquires about CSAs
wherein the foreign corporation was a
participant. Filers are required to file
Nov 22, 2021

multiple Parts VIII if there are multiple
CSAs where the foreign corporation is a
participant.
Part VIII, line 45. This line has been
moved from the old Part VII, line 4, to
consolidate all lines relating to CSAs
under Part VIII.

Reminders

Change of address. There is a
change in mailing address for
foreign-owned U.S. disregarded entities
(DE) required to file Form 5472. See
Foreign-owned U.S. DEs under When
and Where To File, later.

General Instructions
Purpose of Form

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.

Definitions
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.
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
Cat. No. 59641T

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,
• 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, earlier.
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;
• 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; or

• Any transaction is listed in Part V.

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:
• 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.

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:

When and Where To File

File Form 5472 as an attachment to the
reporting corporation's income tax
return by the due date (including
extensions) of that return.
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.

DRAFT AS OF
November 23, 2021
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.

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 and, in the case of a reporting
corporation that is a foreign-owned U.S.
DE, also had no reportable transactions
of the type listed in Part V of the form.

• 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
• 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.
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.

-2-

Dedicated mailing address.
Foreign-owned U.S. DEs are required to
use the following dedicated mailing
address. These filers do not use the
mailing address provided in the
Instructions for Form 1120.
Note. “Foreign-owned U.S. DE” should
be written across the top of the Form
1120. File these forms by:
• Fax (300 DPI or higher) to
855-887-7737, or
• Mail to:
Internal Revenue Service
1973 Rulon White Blvd
M/S 6112 Attn: PIN Unit
Ogden, UT 84201
Foreign-owned U.S. DEs are
required to use the special
CAUTION mailing address, as mentioned
earlier. These filers do not use the
mailing addresses provided in the
Instructions for Form 1120.

!

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, 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.
Instructions for Form 5472 (Rev. 12-2021)

For further general information, see
the Instructions for Form 7004.

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.

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.

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
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).

DRAFT AS OF
November 23, 2021
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, earlier, 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)(10).

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.

Record Maintenance
Requirements

A reporting corporation must keep the
permanent books of account or records
Instructions for Form 5472 (Rev. 12-2021)

Specific Instructions

Part I—Reporting
Corporation

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 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
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

-3-

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
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:
• Foreign person has the same
meaning as provided earlier under
Definitions; and
• 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—25% Foreign
Shareholder

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 4a through 4e
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 5a through 5e
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 6a through 6e
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.

Requirements. The reference ID
number that is entered must be
alphanumeric (defined later), 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 that 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 to the right. 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 earlier, 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.

-4-

Instructions for Form 5472 (Rev. 12-2021)

DRAFT AS OF
November 23, 2021
Report on lines 7a through 7e
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.

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.
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 later.
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.

Note. This correlation requirement
applies only to the first year the new
reference ID number is used.

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).

Part III—Related Party

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 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.

Part IV—Monetary
Transactions Between
Reporting Corporations
and Foreign Related Party

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). 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 CSA
participants.

Line 31. 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 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.

DRAFT AS OF
November 23, 2021
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
related foreign party must be entered in
Part IV.
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.”
Instructions for Form 5472 (Rev. 12-2021)

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 CSA that was not in
effect before January 5, 2009. See
Regulations sections 1.482-7(m)(1) and
(m)(2)(i).

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 due and owed).
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.
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 CSA that was not in
effect before January 5, 2009. See
Regulations sections 1.482-7(m)(1) and
(m)(2)(i).
Line 17. 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 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.
-5-

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.

Part V—Reportable
Transactions of a
Reporting Corporation
That Is a Foreign-Owned
U.S. DE

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.

Part VI—Nonmonetary and
Less-Than-Full
Consideration
Transactions Between the
Reporting Corporation and
the Foreign Related Party
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
FMV of all properties and services
exchanged, if possible, or some other
reasonable indicator of value.

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.
Payments to which section 267A
applies. Interest or royalty paid or
accrued by the reporting corporation
(including through a partnership) is
subject to section 267A. Section 267A
generally applies to interest or royalty
paid or accrued pursuant to a hybrid
arrangement (such as, for example, a
payment pursuant to a hybrid
instrument, or a payment to a reverse
hybrid), provided that the payment or
accrual is to a related party (or pursuant
to a structured arrangement). In
addition, pursuant to an imported
mismatch rule, section 267A generally
applies to interest or royalty paid or
accrued pursuant to a non-hybrid
arrangement where the income
attributable to that payment or accrual is
directly or indirectly offset by certain
deductions involving hybridity incurred
by a related party or pursuant to a
structured arrangement. However,
section 267A does not apply if a de
minimis exception is satisfied. See
Regulations section 1.267A-1(c). For
purposes of section 267A, interest and
royalty are defined broadly. For
additional information about
arrangements subject to section 267A,
see Regulations sections 1.267A-2 and
1.267A-4. Also see the anti-avoidance
rule under Regulations section
1.267A-5(b)(6).

income (FDII) derived from transactions
described in Part IV and enter the
amounts included in Part IV on lines 41b
through 41d. 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
November 23, 2021
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,
earlier, for information on reasonable
estimates and small amounts.

Part VII—Additional
Information

!

CAUTION

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

Line 39. Check “Yes” if during the tax
year the foreign parent participant had
any CSAs with any U.S. corporation. If
“Yes,” you should complete Part VIII.
Complete and submit a separate Part
VIII with each CSA you may have with
the foreign parent participant.
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

Extent to which deduction is
disallowed. When section 267A
applies to interest or royalty paid or
accrued pursuant to a hybrid
arrangement, it generally disallows a
deduction for the amount to the extent
that, under the foreign tax law, there is
not a corresponding income inclusion
(including long-term deferral). However,
the deduction is not disallowed to the
extent the amount is directly or indirectly
included in income in the United States,
such as if the amount is taken into
account with respect to a U.S.
shareholder under section 951(a) or
section 951A. For additional
information, see Regulations sections
1.267A-2 through 1.267A-4. For
examples illustrating the application of
section 267A, see Regulations section
1.267A-7.
Lines 41a–41d. Check the “Yes” box if
the filer of this Form 5472 is claiming a
deduction under section 250 with
respect to foreign-derived intangible
-6-

Line 42. Check the “Yes” box if the
reporting corporation has 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 safe-haven range of Regulations
section 1.482-2(a)(2)(iii)(B)(1) (100% to
130% of the Applicable Federal Rate
(AFR) for the relevant term). If the
safe-haven rate was not selected, check
“No.”

Lines 43a and 43b. Check “Yes” if the
reporting corporation made at least one
distribution or acquisition (as defined by
Regulations section 1.385-3) during the
period including the tax year and the
preceding 3 tax years, and the reporting
corporation issued or refinanced
indebtedness owed to a foreign related
party during the period beginning 36
months before the date of the respective
distribution or acquisition and ending 36
months after the date of the distribution
or acquisition. If “Yes,” enter:
1. The amount of such
distribution(s) and acquisition(s), and
2. The amount of such related party
indebtedness.
For purposes of this question, do not
count indebtedness that the reporting
corporation treats as stock pursuant
Regulations section 1.385-3. Check
“No” if such reporting corporation made
no such distribution or acquisition.

Part VIII—Cost Sharing
Arrangement (CSA)

Note. A separate Part VIII must be filed
for each CSA as defined in Regulations
section 1.482-7(b) in which the foreign
corporation was a controlled participant
(as defined in Regulations section
1.482-7(j)) during the tax year. All
amounts should be reported in U.S.
dollars.

Line 47. Enter the foreign corporation’s
share of reasonably anticipated benefits
(RAB) for the CSA during the tax year.
See Regulations section 1.482-7(e) for
Instructions for Form 5472 (Rev. 12-2021)

more information on a controlled
participant’s share of RAB. If the foreign
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.

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.

• Treats the character of all items of
income, deduction, gain, or loss with
respect to a payment according to the
derivative as ordinary.
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.

DRAFT AS OF
November 23, 2021
Lines 48b and 48c. See Regulations
section 1.482-7(d)(1) and (2) 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. If the CSA
participants have made an election
under Regulations section 1.482-7(d)(3)
(iii)(B), enter on line 48b the amount
reported as an expense in audited
financial statements during the tax year
for stock-based compensation that was
granted during the term of the CSA and
is directly identified with, or reasonably
allocable to, the IDA. 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 IDC 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 foreign
corporation for the tax year based on
the foreign corporation’s RAB share.

Part IX—Base Erosion
Payments and Base
Erosion Tax Benefits
Under Section 59A
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

Instructions for Form 5472 (Rev. 12-2021)

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 which 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)(i)(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:
• Recognizes gain or loss as if such
derivative were sold for its FMV on the
last business day of the tax year (and
any additional times required by the
taxpayer’s method of accounting);
• Treats any gain or loss so recognized
as ordinary; and

-7-

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