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Mandatory Government Survey—Survey of US Persons Service and IP Transactions with Foreign Persons

Posted on May 15, 2018 by

Sue Tuson

Sue Tuson

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The US Department of Commerce Bureau of Economic Analysis (BEA) has issued a mandatory survey of select services and intellectual property transactions with foreign persons. The survey is filed via form BE-120 and is required for US persons who either sell or purchase services or IP from foreign parties. The survey is required whether or not the US person has been contacted by BEA. For US persons that had combined sales of covered services or IP exceeding $2 million in 2017 or have purchased of covered service of IP exceeding $1million in 2017, the report requires additional sales by country information in increments of $500.

You can find a copy of the survey on the Bureau of Economic Analysis website. To assist in determining if you have a covered transaction, you can review the tables provided in the form that list the various categories of transactions. Some common IP transactions include the sale or purchase of rights related to use of computer software, trademarks, and distribution rights. Some common service transactions would relate the payment or charging of management fees, information services, installation or contract manufacturing services. The BEA website also provides additional tools to help businesses determine if they need to file including a decision tool and videos regarding reporting requirements, reporting contract manufacturing services and reporting information on service by mode of supply.

The BE 120 survey is due June 29, 2018 (or by July 30, 2018 if you sign up to use the BEA’s efile system You may request an extension in writing by email or fax before the due date of the form.

Penalties for Noncompliance: Individuals or companies that fail to respond to the BE-120 survey can subject to civil fines of up to $45,000, with criminal penalties possible for willful noncompliance.

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Sue Tuson

Shareholder, International Tax

As an international tax advisor, Sue helps businesses structure their operations globally to mitigate tax costs and maximize profits.

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