Specific Instructions

Table of Contents

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 V 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 V. 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.

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

Line 1l.   Provide the principal country(ies) where business is conducted. Do not include a 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.

Part II

Note.

Only 25% foreign-owned U.S. corporations complete Part II.

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.

Lines 1b(1), 2(b)(1), 3(b)(1), and 4(b)(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 employer identification number.

Lines 1b(2), 2(b)(2), 3(b)(2), and 4(b)(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, and no special characters or spaces are permitted. The length of a given reference ID number is limited to 50 characters.

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 assigned to the 25% foreign shareholder or related foreign party with the new reference ID number assigned to the 25% foreign shareholder or related foreign party

  • A 25% foreign shareholder or related foreign party that made an entity classification election on Form 8832 was required under Regulations section 301.6109-1(b)(2)(v) to obtain an EIN to make the election. For the first tax year for which a Form 5472 is filed for the reporting corporation after the 25% foreign shareholder or related foreign party makes an entity classification on Form 8832, the new EIN and the old reference ID number of the 25% foreign shareholder or related foreign party must be entered on Form 5472. Both the EIN and reference ID number may continue to be entered in subsequent years for the 25% foreign shareholder or related foreign party, but at least the EIN must be entered.

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.

Note.

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

Lines 3a through 3e and lines 4a through 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 employer identification number.

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 V, 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 (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.

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 pursuant 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 pursuant 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).

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.

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 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 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

Note.

Do not complete Part V 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.

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 V if the intangible property was related and incidental to the transfer of the tangible property (e.g., a right to warranty services).

See the instructions for Part IV for information on reasonable estimates and small amounts.

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