Form 5472 Information Return of a 25% Foreign-Owned U.S.

Corporation
or a Foreign Corporation Engaged in a U.S. Trade or Business
(Rev. December 2006) OMB No. 1545-0805
(Under Sections 6038A and 6038C of the Internal Revenue Code)
For tax year of the reporting corporation beginning , , and ending ,
Department of the Treasury
Internal Revenue Service Note. Enter all information in English and money items in U.S. dollars.
Part I Reporting Corporation (see instructions). All reporting corporations must complete Part I.
1a Name of reporting corporation 1b Employer identification number

Number, street, and room or suite no. (if a P.O. box, see instructions) 1c Total assets

City or town, state, and ZIP code (If a foreign address, see instructions.)
$
1d Principal business activity � 1e Principal business activity code �

1f Total value of gross payments made or received 1g Total number of Forms 5472 1h Total value of gross payments made or received
(see instructions) reported on this Form 5472 filed for the tax year (see instructions) reported on all Forms 5472
$ $
1i Check here if this 1j Country of 1k Country(ies) under whose laws the reporting 1l Principal country(ies) where
is a consolidated incorporation corporation files an income tax return as a resident business is conducted
filing of Form
5472 �

2 Check here if, at any time during the tax year, any foreign person owned, directly or indirectly, at least 50% of (a) the total voting
power of all classes of the stock of the reporting corporation entitled to vote, or (b) the total value of all classes of stock of the
reporting corporation �

Part II 25% Foreign Shareholder (see instructions)

1a Name and address of direct 25% foreign shareholder 1b U.S. identifying number, if any

1c Principal country(ies) where 1d Country of citizenship, 1e Country(ies) under whose laws the direct 25% foreign
business is conducted organization, or incorporation shareholder files an income tax return as a resident

2a Name and address of direct 25% foreign shareholder 2b U.S. identifying number, if any

2c Principal country(ies) where 2d Country of citizenship, 2e Country(ies) under whose laws the direct 25% foreign
business is conducted organization, or incorporation shareholder files an income tax return as a resident

3a Name and address of ultimate indirect 25% foreign shareholder 3b U.S. identifying number, if any

3c Principal country(ies) where 3d Country of citizenship, 3e Country(ies) under whose laws the ultimate indirect 25%
business is conducted organization, or incorporation foreign shareholder files an income tax return as a resident

4a Name and address of ultimate indirect 25% foreign shareholder 4b U.S. identifying number, if any

4c Principal country(ies) where 4d Country of citizenship, 4e Country(ies) under whose laws the ultimate indirect 25%
business is conducted organization, or incorporation foreign shareholder files an income tax return as a resident

Part III Related Party (see instructions)

Check applicable box: Is the related party a foreign person or U.S. person?
All reporting corporations must complete this question and the rest of Part III.
1a Name and address of related party 1b U.S. identifying number, if any

1c Principal business activity � 1d Principal business activity code �

1e Relationship—Check boxes that apply: Related to reporting corporation Related to 25% foreign shareholder 25% foreign shareholder
1f Principal country(ies) where business is conducted 1g Country(ies) under whose laws the related party files an income tax return as
a resident

For Paperwork Reduction Act Notice, see page 4. Cat. No. 49987Y Form 5472 (Rev. 12-2006)
Form 5472 (Rev. 12-2006) Page 2
Part IV Monetary Transactions Between Reporting Corporations and Foreign Related Party (see instructions)
Caution: Part IV must be completed if the “foreign person” box is checked in the heading for Part III.
If estimates are used, check here �

1 Sales of stock in trade (inventory) 1

2 Sales of tangible property other than stock in trade 2
3 Rents and royalties received (for other than intangible property rights) 3
4 Sales, leases, licenses, etc., of intangible property rights (e.g., patents, trademarks, secret formulas) 4
5 Consideration received for technical, managerial, engineering, construction, scientific, or like services 5
6 Commissions received 6
7 Amounts borrowed (see instructions) a Beginning balance b Ending balance or monthly average � 7b
8 Interest received 8
9 Premiums received for insurance or reinsurance 9
10 Other amounts received (see instructions) 10
11 Total. Combine amounts on lines 1 through 10 11
12 Purchases of stock in trade (inventory) 12
13 Purchases of tangible property other than stock in trade 13
14 Rents and royalties paid (for other than intangible property rights) 14
15 Purchases, leases, licenses, etc., of intangible property rights (e.g., patents, trademarks, secret formulas) 15
16 Consideration paid for technical, managerial, engineering, construction, scientific, or like services 16
17 Commissions paid 17
18 Amounts loaned (see instructions) a Beginning balance b Ending balance or monthly average � 18b
19 Interest paid 19
20 Premiums paid for insurance or reinsurance 20
21 Other amounts paid (see instructions) 21
22 Total. Combine amounts on lines 12 through 21 22
Part V Nonmonetary and Less-Than-Full Consideration Transactions Between the Reporting Corporation
and the Foreign Related Party (see instructions)
Describe these transactions on an attached separate sheet and check here. �
Part VI Additional Information
All reporting corporations must complete Part VI.
1 Does the reporting corporation import goods from a foreign related party? Yes No
2a If “Yes,” is the basis or inventory cost of the goods valued at greater than the customs value of the imported goods? Yes No
If “No,” do not complete b and c below.
b If “Yes,” attach a statement explaining the reason or reasons for such difference.
c If the answers to questions 1 and 2a are “Yes,” were the documents used to support this treatment of the imported
goods in existence and available in the United States at the time of filing Form 5472? Yes No

General Instructions 25% foreign shareholder. Generally, a � Any other person who is related to the
foreign person (defined on page 3) is a 25% reporting corporation within the meaning of
Section references are to the Internal foreign shareholder if the person owns, section 482 and the related regulations.
Revenue Code unless otherwise noted. directly or indirectly, at least 25% of either: “Related party” does not include any
What’s New � The total voting power of all classes of corporation filing a consolidated Federal
stock entitled to vote or income tax return with the reporting
New filing address. The IRS has changed
� The total value of all classes of stock of the corporation.
the filing address for duplicate Forms 5472.
See When and Where To File on page 3. corporation. The rules in section 318 apply to the
The constructive ownership rules of section definition of related party with the
Purpose of Form 318 apply with the following modifications to modifications listed under the definition of
determine if a corporation is 25% foreign 25% foreign shareholder above.
Use Form 5472 to provide information
required under sections 6038A and 6038C owned. Substitute “10%” for “50%” in Reportable transaction. A reportable
when reportable transactions occur during the section 318(a)(2)(C). Do not apply sections transaction is:
tax year of a reporting corporation with a 318(a)(3)(A), (B), and (C) so as to consider a � Any type of transaction listed in Part IV
foreign or domestic related party. U.S. person as owning stock that is owned (e.g., sales, rents, etc.) for which monetary
by a foreign person. consideration (including U.S. and foreign
Definitions
Related party. A related party is: currency) was the sole consideration paid or
Reporting corporation. A reporting received during the reporting corporation’s
� Any direct or indirect 25% foreign
corporation is either: tax year or
shareholder of the reporting corporation,
� A 25% foreign-owned U.S. corporation or � Any transaction or group of transactions
� Any person who is related (within the
� A foreign corporation engaged in a trade or meaning of section 267(b) or 707(b)(1)) to the listed in Part IV, if:
business within the United States. reporting corporation, 1. Any part of the consideration paid or
25% foreign owned. A corporation is 25% � Any person who is related (within the received was not monetary consideration or
foreign owned if it has at least one direct or meaning of section 267(b) or 707(b)(1)) to a 2. If less than full consideration was paid or
indirect 25% foreign shareholder at any time 25% foreign shareholder of the reporting received.
during the tax year. corporation or
Form 5472 (Rev. 12-2006) Page 3

Transactions with a U.S. related party, � Gross income from sources within the If the failure continues for more than 90
however, are not required to be specifically United States or income effectively days after notification by the IRS, an
identified in Parts IV and V. connected, or treated as effectively additional penalty of $10,000 will apply. This
Direct 25% foreign shareholder. A foreign connected, with the conduct of a trade or penalty applies with respect to each related
person is a direct 25% foreign shareholder if business within the United States or party for which a failure occurs for each
it owns directly at least 25% of the stock of � Any expense, loss, or other deduction that 30-day period (or part of a 30-day period)
the reporting corporation by vote or value. is allocable or apportionable to such income. during which the failure continues after the
90-day period ends.
Ultimate indirect 25% foreign shareholder. Consolidated returns. If a reporting
An ultimate indirect 25% foreign shareholder corporation is a member of an affiliated group Criminal penalties under sections 7203,
is a 25% foreign shareholder whose filing a consolidated income tax return, 7206, and 7207 may also apply for failure to
ownership of stock of the reporting Regulations section 1.6038A-2 may be submit information or for filing false or
corporation is not attributed (under the satisfied by filing a U.S. consolidated Form fraudulent information.
principles of section 958(a)(1) and (2)) to any 5472. The common parent must attach to Record Maintenance Requirements
other 25% foreign shareholder. See Rev. Form 5472 a schedule stating which A reporting corporation must keep the
Proc. 91-55, 1991-2 C.B. 784. members of the U.S. affiliated group are permanent books of account or records as
Foreign person. A foreign person is: reporting corporations under section 6038A, required by section 6001. These books must
and which of those members are joining in
� An individual who is not a citizen or the consolidated filing of Form 5472. The
be sufficient to establish the correctness of
resident of the United States, the reporting corporation’s Federal income
schedule must show the name, address, and tax return, including information or records
� An individual who is a citizen or resident of employer identification number of each that might be relevant to determine the
a U.S. possession who is not otherwise a member who is including transactions on the correct treatment of transactions with related
citizen or resident of the United States, consolidated Form 5472. parties. See Regulations section 1.6038A-3
� Any partnership, association, company, or Note. A member is not required to join in for more detailed information. Also, see
corporation that is not created or organized in filing a consolidated Form 5472 just because Regulations sections 1.6038A-1(h) and
the United States, the other members of the group choose to file 1.6038A-1(i) for special rules that apply to
� Any foreign estate or foreign trust one or more Forms 5472 on a consolidated small corporations and reporting corporations
described in section 7701(a)(31) or basis. with related party transactions of de minimis
� Any foreign government (or agency or value.
instrumentality thereof) to the extent that the
When and Where To File
foreign government is engaged in the conduct File Form 5472 by the due date of the reporting Specific Instructions
of a commercial activity as defined in section corporation’s income tax return (including
892. extensions). A separate Form 5472 must be filed Part I
for each foreign or domestic related party with Line 1a. Address. Include the suite, room, or
However, the term “foreign person” does
which the reporting corporation had a reportable other unit number after the street address. If
not include any foreign person who consents
transaction during the tax year. Attach Form the Post Office does not deliver mail to the
to the filing of a joint income tax return.
5472 to the income tax return. You are required street address and the corporation has a P.O.
to file a duplicate copy of Form 5472 with the
Who Must File Internal Revenue Service Center, P. O. Box
box, show the box number instead.
Generally, a reporting corporation must file 409101, Ogden, UT 84409. However, if you file Foreign address. Enter the information in
Form 5472 if it had a reportable transaction your income tax return electronically, see the following order: city, province or state,
with a foreign or domestic related party. Electronic Filing of Form 5472 below for and country. Follow the country’s practice for
Exceptions from filing. A reporting additional information. If the reporting entering the postal code, if any. Do not
corporation is not required to file Form 5472 if corporation’s income tax return is not filed when abbreviate the country name.
any of the following apply: due, file a timely Form 5472 (with a copy to Line 1c. Total assets. Domestic reporting
1. It had no reportable transactions of the Ogden) separately with the service center where corporations enter the total assets from item
types listed in Parts IV and V of the form. the tax return is due. When the tax return is filed, D, page 1, Form 1120. Foreign reporting
attach a copy of the previously filed Form 5472. corporations enter the amount from line 15,
2. A U.S. person that controls the foreign column (d), Schedule L, Form 1120-F.
related corporation files Form 5471, Electronic Filing of Form 5472
Information Return of U.S. Persons With Lines 1d and 1e. Enter a description of the
If you file your income tax return principal business activity and enter the
Respect To Certain Foreign Corporations, for electronically, see the instructions for your
the tax year to report information under principal business activity code. See the
income tax return for general information instructions for Form 1120 or Form 1120-F for
section 6038. To qualify for this exception, about electronic filing. If you file your original
the U.S. person must complete Schedule M a list of principal business activities and their
Form 5472 electronically (as an attachment to associated codes.
(Form 5471) showing all reportable a timely filed, electronically filed income tax
transactions between the reporting return), such filing satisfies the duplicate filing Line 1f. Enter the total value in U.S. dollars of
corporation and the related party for the tax requirement referred to above. See the first all foreign related party transactions reported
year. sentence under When and Where To File in Parts IV and V of this Form 5472. This is
3. The related corporation qualifies as a above for the definition of “timely.” the total of the amounts entered on lines 11
foreign sales corporation for the tax year and and 22 of Part IV plus the fair market value of
files Form 1120-FSC, U.S. Income Tax
Penalties the nonmonetary and less-than-full
Return of a Foreign Sales Corporation. Penalties for failure to file Form 5472. A consideration transactions reported in Part V.
penalty of $10,000 will be assessed on any Do not complete line 1f if the reportable
4. It is a foreign corporation that does not transaction is with a U.S. related party.
reporting corporation that fails to file Form
have a permanent establishment in the United
5472 when due and in the manner Line 1g. File a separate Form 5472 for each
States under an applicable income tax treaty
prescribed. The penalty also applies for failure foreign or each U.S. person who is a related
and timely files Form 8833.
to maintain records as required by party with which the reporting corporation
5. It is a foreign corporation all of whose Regulations section 1.6038A-3. had a reportable transaction. Enter the total
gross income is exempt from taxation under number of Forms 5472 (including this one)
Note. Filing a substantially incomplete Form
section 883 and it timely and fully complies being filed for the tax year.
5472 constitutes a failure to file Form 5472.
with the reporting requirements of sections
883 and 887. Each member of a group of corporations Line 1h. Enter the total value in U.S. dollars
filing a consolidated information return is a of all foreign related party transactions
6. Both the reporting corporation and the reported in Parts IV and V of all Forms 5472
separate reporting corporation subject to a
related party are not U.S. persons as defined filed for the tax year. This is the total of the
separate $10,000 penalty and each member
in section 7701(a)(30) and the transactions will amounts entered on line 1f of all Forms 5472
is jointly and severally liable.
not generate in any tax year: filed for the tax year (including this one).
Form 5472 (Rev. 12-2006) Page 4

Line 1l. Provide the principal country(ies) If the related party transactions occur Part V
where business is conducted. Do not include between a related party and a partnership
Note. Do not complete Part V for transactions
a country(ies) in which business is conducted that is, in whole or in part, owned by a
with a domestic related party.
solely through a subsidiary. Do not enter reporting corporation, the reporting
“worldwide” instead of listing the country(ies). corporation reports only the percentage of If the related party is a foreign person, the
These rules also apply to lines 2c, 3c, 4c, the value of the transaction(s) equal to the reporting corporation must attach a schedule
Part II, and line 1f, Part III. percentage of its partnership interest. This describing each reportable transaction, or
rule does not apply if the reporting group of reportable transactions. The
Line 2. For purposes of this line:
corporation owns a less-than-25% interest in description must include sufficient information
� “Foreign person” has the same meaning as the partnership. The rules of attribution apply so that the nature and approximate monetary
provided on page 3. when determining the reporting corporation’s value of the transaction or group of
� 50% direct or indirect ownership is percentage of partnership interest. transactions can be determined. The
determined by applying the constructive schedule should include:
Generally, all reportable transactions
ownership rules of section 318 with the between the reporting corporation and a 1. A description of all property (including
modifications listed under 25% foreign related foreign party must be entered in monetary consideration), rights, or obligations
shareholder on page 2. Part IV. transferred from the reporting corporation to
the foreign related party and from the foreign
Part II Reasonable estimates. When actual
related party to the reporting corporation;
amounts are not determinable, enter
Only 25% foreign-owned U.S. corporations 2. A description of all services performed
reasonable estimates (see below) of the total
complete Part II. by the reporting corporation for the foreign
dollar amount of each of the categories of
The form provides sufficient space to transactions conducted between the reporting related party and by the foreign related party
report information for two direct 25% foreign corporation and the related person in which for the reporting corporation; and
shareholders and two ultimate indirect 25% monetary consideration (U.S. currency or 3. A reasonable estimate of the fair market
foreign shareholders. If more space is foreign currency) was the sole consideration value of all properties and services
needed, show the information requested in paid or received during the tax year of the exchanged, if possible, or some other
Part II on an attached sheet. reporting corporation. reasonable indicator of value.
Report on lines 1a through 1e information A reasonable estimate is any amount If the entire consideration received for any
about the direct 25% foreign shareholder who reported on Form 5472 that is at least 75% transaction includes both tangible and
owns (by vote or value) the largest but not more than 125% of the actual amount intangible property and the consideration paid
percentage of the stock of the U.S. reporting required to be reported. is solely monetary consideration, report the
corporation. transaction in Part IV instead of Part V if the
Small amounts. If any actual amount in a
Report on lines 2a through 2e information transaction or a series of transactions intangible property was related and incidental
about the direct 25% foreign shareholder who between a foreign related party and the to the transfer of the tangible property (e.g., a
owns (by vote or value) the second-largest reporting corporation does not exceed a total right to warranty services).
percentage of the stock of the U.S. reporting of $50,000, the amount may be reported as See the instructions for Part IV for
corporation. “$50,000 or less.” information on reasonable estimates and
Report on lines 3a through 3e information Line 7. Amounts borrowed. Report amounts small amounts.
about the ultimate indirect 25% foreign borrowed using either the outstanding
shareholder who owns (by vote or value) the balance method or the monthly average Paperwork Reduction Act Notice. We ask
largest percentage of the stock of the U.S. method. If the outstanding balance method is for the information on this form to carry out
reporting corporation. used, enter the beginning and ending the Internal Revenue laws of the United
Report on lines 4a through 4e information outstanding balance for the tax year on lines States. You are required to give us the
about the ultimate indirect 25% foreign 7a and 7b. If the monthly average method is information. We need it to ensure that you are
shareholder who owns (by vote or value) the used, skip line 7a and enter the monthly complying with these laws and to allow us to
second-largest percentage of the stock of the average for the tax year on line 7b. figure and collect the right amount of tax.
U.S. reporting corporation. Line 10. Other amounts received. Enter You are not required to provide the
Lines 3a through 3e and lines 4a amounts received that are not specifically information requested on a form that is
through 4e. Attach an explanation of the reported on lines 1 through 9. subject to the Paperwork Reduction Act
attribution of ownership. See Rev. Proc. Include amounts on line 10 to the extent that unless the form displays a valid OMB control
91-55 and Regulations section 1.6038A-1(e). these amounts are taken into account in number. Books or records relating to a form
determining the taxable income of the or its instructions must be retained as long as
Part III reporting corporation. their contents may become material in the
All filers must complete Part III even if the Line 18. Amounts loaned. Report amounts administration of any Internal Revenue law.
related party has been identified in Part II as loaned using either the outstanding balance Generally, tax returns and return information
a 25% foreign shareholder. Report in Part III method or the monthly average method. If the are confidential, as required by section 6103.
information about the related party (domestic outstanding balance method is used, enter The time needed to complete and file this
or foreign) with which the reporting the beginning and ending outstanding form will vary depending on individual
corporation had reportable transactions balance for the tax year on lines 18a and circumstances. The estimated average time
during the tax year. 18b. If the monthly average method is used, is:
skip line 18a and enter the monthly average Recordkeeping 17 hr., 42 min.
Part IV for the tax year on line 18b.
Learning about the law
Do not complete Part IV for transactions with Line 21. Other amounts paid. Enter amounts or the form 3 hr., 4 min.
a domestic related party. paid that are not specifically reported on lines
12 through 20. Include amounts on line 21 to Preparing and sending
When completing Part IV or Part V, the the form to the IRS 3 hr., 30 min.
terms “paid” and “received” include accrued the extent that these amounts are taken into
payments and accrued receipts. State all account in determining the taxable income of If you have comments concerning the
amounts in U.S. dollars and attach a the reporting corporation. accuracy of these time estimates or
schedule showing the exchange rates used. 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.

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