The US Department of the Treasury published a notice in the Federal Register on 25 April 2025, listing countries that may require participation or cooperation in an international boycott.
The list includes Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, and Yemen.
Anyone with operations in or tied to a listed country, or involved with its government, companies, or nationals, must file Form 5713 (International Boycott Report), with some exceptions. Form 5713 must be filed by anyone operating in a non-listed country that requires participation in an international boycott as a condition of doing business.
Electronic filing of Form 5713
If you file your original Form 5713 electronically (as an attachment to your e-filed income tax return), you are not required to file a duplicate Form 5713.
Tax benefits that may be lost
Taxpayers who are required to file this form risk losing specific tax benefits, including:
- The foreign tax credit (section 908(a)).
- Deferral of taxation of earnings of a CFC (section 952(a)(3)).
- Deferral of taxation of IC-DISC income (section 995(b)(1)(F)(ii)).
- Exemption of foreign trade income of an FSC (section 927(e)(2), as in effect before its repeal).
- Exclusion of extraterritorial income from gross income (section 941(a)(5), as in effect before its repeal).
Penalties
Willful failure to file Form 5713 may result in a USD 25,000 fine, imprisonment for up to 1 year, or both.
Earlier, on 3 January 2025, the US Treasury updated its list of countries requiring participation in an international boycott as a condition for doing business. The list includes Iraq, Lebanon, Syria, Kuwait, Qatar, Saudi Arabia, Libya, and Yemen.
