Where do foreign related-party service fees go on Form 5472?
· 1 min read
For covered services with a foreign related party, Form 5472 Part IV uses line 15 for consideration received and line 29 for consideration paid by the reporting corporation.
What to check
The lines cover technical, managerial, engineering, construction, scientific and similar services. Read the agreement and invoice together. If they separately identify a commission or an intangible-property license, evaluate that amount under its own line. Keep both directions in the working papers.
Example
A U.S. reporting corporation pays its foreign parent $18,000 for separately invoiced management services and receives $5,000 for engineering. The payments are evaluated separately under lines 29 and 15.
Before you proceed
- Match the service description to the contract.
- Identify who paid and who received the fee.
- Keep any separately priced rights and commissions identifiable.
Can I report only the net amount?
Use the separately applicable received and paid lines for reportable consideration and retain the gross amounts behind them.
Related guides
- How does Form 5472 separate rent from intangible-property royalties?
- Where does related-party loan interest go on Form 5472?
- When does Form 5472 need a separate Part VIII for cost sharing?