On October 8, 2021, a notice from the US Treasury Department was published in the Federal Register on the current list of countries that will be boycotted by the international community. The countries listed include Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, and Yemen.
Any person or member of a controlled group operating in or associated with a listed country or with a government, company or citizen of a listed country must file Form 5713 (International Boycott Report). Form 5713 must be filed by anyone doing business in a country not included in this list that requires participation or cooperation with an international boycott as a condition of doing business with the government.
Taxpayers who are required to complete a form may lose certain tax benefits, including:
- Foreign tax credit (section 908 (a));
- Deferral of taxation of CFC income (section 952 (a) (3));
- Deferral of Taxation of IC-DISC Income (Section 995 (b) (1) (F) (ii));
- FSC Foreign Trade Revenue Exemption (Section 927 (e) (2), in force prior to its repeal); and
- Exclusion of extraterritorial income from gross income (section 941 (a) (5) in effect prior to its cancellation).
- The exact limits of benefits are determined when filling out Form 5713.
The above is for informative purposes only. Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.