5472 Instructions for Form 5472

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Instructions for Form 5472

Department of the Treasury
Internal Revenue Service

(Rev. January 2023)

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 1, 2022

Section references are to the Internal
Revenue Code unless otherwise noted.

shareholder at any time during the tax
year.

Future Developments

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.

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

Part VII, lines 41a through 41d. On
Form 5472, these lines have been
reworded to reflect the final
regulations under section 250 (T.D.
9901, 85 FR 43042, July 15, 2020, as
amended by 85 FR 68249, Oct. 28,
2020; T.D. 9956, 86 FR 52971, Sept.
24, 2021).
Part VIII, lines 48b and 48c. These
instructions have a new attachment
requirement for Part VIII, lines 48b
and 48c. Specifically, if the taxpayer
made the election described in
Regulations section 1.482-7(d)(3)(iii)
(B) or Notice 2005-99, the taxpayer is
required to attach the statement
described in the instructions for Part
VIII, lines 48b and 48c, 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
Oct 31, 2022

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.
Cat. No. 59641T

“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 listed in Part V; or
• Any transaction or group of
transactions listed in Part VI.
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.
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.

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

filing requirements or, if none, the
calendar year.
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.

DRAFT AS OF
November 1, 2022

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.
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.

Note. Exception 6 does not apply to
foreign-owned U.S. DEs.

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.

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
-2-

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.
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.

Instructions for Form 5472 (Rev. 1-2023)

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

!

Accrued Payments and
Receipts

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 (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).

Specific Instructions

Line 1j. Check the box if this is the
first year the U.S. reporting
corporation has filed a Form 5472.

DRAFT AS OF
November 1, 2022

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 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
Instructions for Form 5472 (Rev. 1-2023)

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 (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.
-3-

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:
• 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.

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.

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.

DRAFT AS OF
November 1, 2022

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.
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

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 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
-4-

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).
Instructions for Form 5472 (Rev. 1-2023)

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.

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.

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).

DRAFT AS OF
November 1, 2022

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
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.
Reasonable estimates. When
actual amounts are not determinable,
Instructions for Form 5472 (Rev. 1-2023)

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). 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.

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).
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.
-5-

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.

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

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).

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).

DRAFT AS OF
November 1, 2022

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.

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.

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.
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
-6-

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
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 corporation 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, 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
corporation, 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 42. Check the “Yes” box if,
during the tax year, the reporting
corporation had any loans to or from
Instructions for Form 5472 (Rev. 1-2023)

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).

by the fair market value 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).

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.

DRAFT AS OF
November 1, 2022

Note. Complete lines 43a, 43b(1),
and 43b(2) only if the reporting
corporation is a domestic corporation.
(Do not complete these lines if the
reporting corporation is a
foreign-owned U.S. DE.) In
completing these lines, do not
account for debt instruments that
were issued, or distributions or
acquisitions that occurred, before
April 5, 2016. See Regulations
sections 1.385-3(g)(3) and (b)(3)(viii).
Line 43a. Check “Yes” if, during the
tax year, the reporting corporation
engaged in at least one of the
transactions described in Regulations
section 1.385-3(b)(2). Also check
“Yes” if, taking into account
issuances, distributions, and
acquisitions during the tax year and
previous tax years, the reporting
corporation had issued a debt
instrument to a related party during a
period described in Regulations
section 1.385-3(b)(3)(iii), which
addresses certain issuances of debt
instruments to related parties within
36 months before or after certain
distributions or acquisitions by the
issuer. 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).
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 fair market
values 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

Instructions for Form 5472 (Rev. 1-2023)

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 reporting 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 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
-7-

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.

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 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.

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:
• 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
• 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.

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.

DRAFT AS OF
November 1, 2022

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

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 information.

-8-

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

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 (Rev. 1-2023)