Carrasco, Cartagena 1674
Montevideo, Uruguay 11500
Form submission 5472
In order to avoid erosion of the tax base and withholding taxes on certain payments, made by United States Limited Liability Companies (LLCs), those LLCs, whose owners are foreign natural or legal persons with a participation of at least 25%, and that, during the year, they have incurred in any reportable operation with their shareholder or foreign Companies that do business in the United States, will be required to submit form 5472 to the United States Internal Revenue Services (IRS ).
We clarify that the so-called Disregarded Entities that are not taxed in the United States are included, for which, it will also be necessary to complete form 1120.
Said form must be submitted annually, three and a half months after the end of the fiscal year (04/15 for those companies whose exercise ends on 12/31).
As main reportable operations we find the payments or collections of:
These reportable operations will be detailed on the form, along with the identity of the foreign partner.
Although the standard was approved on December 22, 2017, it has undergone some changes from the aforementioned date to the present, its latest version being December 2018. The biggest change from the latest version is that it includes as reportable operations the dividend or profit distributions to LLC partners.
Failure to submit such a form if applicable carries severe fines ranging from $ 10,000 to $ 25,000.
INSIGHT can help them complete the form according to the requirements established in it, and also has legal and accounting advice in the United States for final preparation and filing with the IRS.
In order to meet the deadline for submitting the Form, we must receive the complete accounting information in our office, about the foreign person or company that must report, 10 business days before the expiration date. In the event that the information is not received in a timely manner, Insight will not be responsible for possible fines incurred for late filing, but yes, an extension of time may be requested, pending acceptance by the IRS and thus avoid fines.
Companies that must report
The Standard establishes that they will report:
Regarding the first point, the Standard mentions that an American LLC is considered to be foreign-owned if at least one shareholder owns 25% directly or indirectly.
Who are considered foreigners?
However, the term “foreign person” does not include any foreign person who agrees to file a tax return.
Exceptions that should not complete the form
A reportable company should not complete form 5472 as long as any of the following occurs: