U.S. citizens and residents with involvements with foreign companies are required to report those companies back to the U.S. under certain circumstances.

Who must file form 5471

There are 5 categories of filers for form 5471 - you can fall under more than one category.

You need to complete a separate form 5471 for each foreign company that you are involved in.

Category 1 filer

• a controlled foreign corporation (see below for definition) or

• a foreign corporation that has at least one U.S. corporation as a shareholder

Category 2 Filer

This category is if you are a U.S. citizen and you are an officer or director of a foreign company where:

• a U.S. person has acquired 10% or more of the stock

• a U.S. person has acquired an additional 10% or more of the stock

Category 3 Filer

A U.S. person who acquires stock in the foreign corporation which, when added to any previously held stock, meets the 10% minimum ownership threshold

Or, a U.S. person who disposes of stock in the foreign corporation so that their total stock is reduced to less than 10%

Category 4 Filer

A U.S. person who owns more than 50% of the stock of the foreign corporation

Category 5 Filer

A U.S. person who owns 10% or more of the stock in a foreign corporation that is a controlled foreign corporation at any time during the tax year and the stock is still held on the last day of the tax year

REPORTING REQUIREMENTS FOR THE FOREIGN COMPANY

Category 3 and 4 filers are required to report the income statement and balance sheet in full for the foreign company on form 5471 under schedule C and schedule F.

All categories of filers report the identification details on page 1.

Full reporting requirements for each category of filer can be found in the form 5471 instructions here.

When To File

While you are living abroad as a U.S. expat, the filing deadline for the U.S. tax return is June 15 each year (extended to July 15 for 2020).

You file form 5471 with your main federal tax return with the IRS.

Next Steps

If you have any questions, e.g. who qualifies as shareholders in certain foreign corporations and are you required to file form 5471, feel free to contact one of our U.S. expat accountants here.