If you run an e-commerce company through a U.S. entity but live abroad, you may be asking whether you need to file Form 5472 with the IRS. The answer doesn’t depend on whether you sell clothes, electronics, supplements, or digital products. It depends on the type of company you formed.
If your company is a foreign-owned single-member LLC or a corporation with at least 25% foreign ownership, then yes, Form 5472 is required. If your e-commerce company is a multi-member LLC taxed as a partnership, Form 5472 usually does not apply.
This guide explains what Form 5472 is, how to tell your entity type, what information must be reported, and why even companies with no sales may still need to file. Since e-commerce often comes with additional complexities—like physical presence in the U.S., sales tax, and ITINs—we will also cover those topics here.
What is Form 5472?
Form 5472 is an IRS information return that discloses transactions between your U.S. company and its foreign owner. It’s not a tax return that calculates taxes due. Instead, the IRS uses it to track cross-border movements of money and value. If your company is foreign-owned, and you are operating as a single-member LLC or corporation, you are almost certainly required to file it.
For e-commerce businesses, common reportable transactions include funding the company from abroad to pay for inventory, reimbursing yourself for expenses, or paying for services on behalf of the company. Even without customer sales, these transactions trigger the requirement to file.
Who must file Form 5472?
The rules depend entirely on your entity type:
- A foreign-owned single-member LLC must file Form 5472 attached to a pro forma Form 1120.
- A U.S. corporation with 25% or more foreign ownership must file Form 5472 attached to its full Form 1120.
- A multi-member LLC treated as a partnership files Form 1065 instead. It does not file Form 5472.
How to know what type of company you have
If you used a formation service, you might not be sure. Here’s how you can tell:
- If you formed an LLC with only one owner, you almost certainly have a single-member LLC. On your EIN confirmation letter, you may see your name listed with “Sole Mbr,” or the letter may describe it as a “disregarded entity.”
- If you formed an LLC with more than one owner, you likely have a multi-member LLC. In this case, your EIN letter may show the applicant’s name with “Mbr,” which indicates multiple members. These companies file Form 1065.
- If you formed a corporation (such as a Delaware C-Corp), you file Form 1120 every year. If foreign shareholders own at least 25%, Form 5472 is also required.
- If you filed a special election (Form 8832 or 2553) to change your classification, that election overrides the default. Reviewing it will tell you how you are treated.
What information goes on Form 5472?
The IRS asks for identifying details about the company, its foreign owner, and any transactions between them. For e-commerce businesses, this typically means:
- Capital contributions from the owner to buy inventory.
- Reimbursements for shipping, warehousing, or marketing.
- Loans between the owner and the company.
- Payments from the company back to the owner.
Even if your e-commerce company had no customer sales, these funding and reimbursement transactions still count.
When is Form 5472 due?
The deadline is the same as corporate returns. For calendar-year companies, Form 5472 is due April 15, with an extension to October 15 available by filing Form 7004. It must be filed together with either a pro forma Form 1120 (for single-member LLCs) or a full Form 1120 (for corporations).
The penalty for a missing or late Form 5472 is $25,000 per year, with additional $25,000 penalties if notices are ignored. These penalties apply even if your company had no sales.
Physical presence considerations for e-commerce companies
Unlike many service businesses, e-commerce often involves physical presence in the United States. For example, if your company holds inventory in a U.S. warehouse, uses Amazon FBA centers, or employs people in the U.S., you may create what the IRS calls a “U.S. trade or business.” This can mean:
- The foreign owner may need to file a Form 1040-NR as a non-resident individual with U.S. income.
- Filing Form 1040-NR requires an ITIN (Individual Taxpayer Identification Number). Bookmate does not apply for ITINs directly, but we partner with theitin.com for this service.
- Having a physical presence can also bring state-level sales tax obligations. For example, storing inventory in California can create nexus there, requiring you to register, collect, and remit sales tax.
Bookmate does not handle state sales tax filings, but you can work with your registered agent, state portals, or compliance providers like Avalara or TaxJar to manage this. Our role is ensuring your federal IRS filings are accurate and timely.
Common questions from e-commerce founders
Does it matter what I sell? No. Whether you sell physical products, dropshipped goods, or digital items, the requirement is based only on entity type and ownership.
Do I need to file if I had no sales? Yes. If you funded the company or reimbursed yourself, those are reportable transactions. Revenue is not the deciding factor.
What if I missed a year? Bookmate does not usually prepare past filings on your behalf, but we can guide you on how to handle them properly.
Staying ahead of filing
Track every transaction between you and your company. If you wire money in, record it as a loan or contribution. If the company pays you back, note it carefully. For e-commerce businesses, also document inventory purchases, warehousing fees, and shipping reimbursements. This makes preparing Form 5472 straightforward and avoids penalties.
Example for an e-commerce company
A founder in Germany sets up a Wyoming single-member LLC to sell products online. In the first year, there are no sales, but he wires $25,000 into the company’s U.S. bank account to buy inventory stored in a California warehouse.
Because inventory is physically present in the U.S., the company likely created a U.S. trade or business, which may require the founder to also file Form 1040-NR and obtain an ITIN. Regardless of sales, the $25,000 funding is a reportable transaction that requires Form 5472 with a pro forma 1120. Filing keeps the company compliant and avoids penalties.
How Bookmate helps e-commerce founders
Bookmate specializes in U.S. federal filings for foreign-owned companies. For e-commerce businesses, we:
- Prepare and file Form 5472 with the pro forma 1120 for single-member LLCs.
- Prepare and file Form 1120 with Form 5472 attached for corporations with foreign shareholders.
- Submit filings from within the U.S. so the IRS accepts them on time.
- Provide guidance on how to address past filings if you missed them.
We do not apply for EINs or ITINs directly, but we partner with theitin.com for ITINs and can recommend formation companies for EIN support. For state sales tax, we do not handle those filings, but can point you toward the right resources.
Final thoughts
Running an e-commerce company through a U.S. entity from abroad is common, but it comes with extra layers of complexity. The IRS doesn’t care what products you sell. What matters is your entity type and ownership. If you are a foreign owner of a single-member LLC or corporation, Form 5472 is required—even if you had no sales.
If your company also has a U.S. physical presence, you may need to file Form 1040-NR and obtain an ITIN. And if your inventory is stored in the U.S., you may owe state sales tax.
Bookmate helps e-commerce founders worldwide stay compliant with federal IRS filings, so you can focus on building your store without worrying about penalties.
Learn more at trybookmate.co or book a consultation today.
