The US Treasury Department issued a notice on Tuesday, 21 May, 2024, in the Federal Register, regarding the current list of countries that need participation in, or cooperation with, an international boycott.
The list includes Kuwait, Iraq, Lebanon, Qatar, Libya, Saudi Arabia, Syria, and Yemen.
Anyone, or any member of a controlled group, engaged in operations within or associated with a listed country, or with its government, companies, or nationals, must file Form 5713 (International Boycott Report).
The form is required for any person operating in a non-listed country that necessitates participation in, or cooperation with, an international boycott as a condition for conducting business with that country.
Taxpayers who must file this form may forfeit certain tax benefits, including:
- The foreign tax credit (section 908(a)).
- Deferral of taxation on earnings of a CFC (section 952(a)(3)).
- Deferral of taxation on IC-DISC income (section 995(b)(1)(F)(ii)).
- Exemption for foreign trade income of an FSC (section 927(e)(2).
- Exclusion of extraterritorial income from gross income (section 941(a)(5).
