If you run a SaaS company through a U.S. entity while living abroad, you may be asking whether you need to file Form 5472 with the IRS. The answer doesn’t depend on whether you sell subscription software, developer tools, or productivity platforms. It depends on the type of entity 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 must be filed. If your SaaS 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 know your entity classification, what transactions need to be reported, and why even SaaS businesses without customers yet must still file. We’ll also walk through an example for SaaS founders and explain how Bookmate helps keep your filings on track.
What is Form 5472?
Form 5472 is an IRS information return. It does not calculate or pay tax, but it reports cross-border transactions between your U.S. company and its foreign owners. The IRS uses it to monitor capital contributions, loans, reimbursements, and payments. If your SaaS company is foreign-owned, you almost certainly need to file.
For SaaS companies, common reportable transactions include wiring money from abroad to cover hosting costs, paying for contractors, or reimbursing yourself for expenses. Even if your app had no paying subscribers, these movements still trigger a filing requirement.
Who must file Form 5472?
The requirement is based entirely on entity type:
- A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120.
- A U.S. corporation with 25% or more foreign shareholders must file Form 5472 with the full Form 1120.
- A multi-member LLC taxed as a partnership files Form 1065 instead, not Form 5472.
How to know what type of company you have
If you used a formation service, you may not know exactly how your company is classified. Here’s how to tell:
- If you formed an LLC with only one owner, you likely have a single-member LLC. Your EIN confirmation letter may show your name followed by “Sole Mbr,” or describe the entity as a “disregarded entity.”
- If you formed an LLC with more than one owner, you probably have a multi-member LLC. In this case, the EIN letter may show the applicant’s name with “Mbr.” Multi-member LLCs file Form 1065.
- If you formed a corporation (such as a Delaware C-Corp), you must file Form 1120 each year. If foreign shareholders own at least 25%, Form 5472 must also be filed.
- If you or your accountant filed an election (Form 8832 or 2553), that election may change your default classification.
What information goes on Form 5472?
The IRS requires basic details about your company (name, EIN, address, state of formation), information about the foreign owner (name, country, ownership percentage), and a record of transactions.
For SaaS companies, this usually means contributions to fund servers, contractors, or marketing expenses, and any reimbursements from the company to the owner. Even without paying customers, these transactions count.
When is Form 5472 due?
Form 5472 is due on the same schedule as corporate returns. For calendar-year companies, the deadline is April 15, with an extension until October 15 available if you file Form 7004. Importantly, Form 5472 must be attached to a return.
For single-member LLCs, this means attaching it to a pro forma Form 1120. For corporations, it is attached to the full Form 1120.
The penalty for late or missing filings is $25,000 per year. Ignoring IRS notices can lead to additional $25,000 penalties. These apply even if your SaaS company had no revenue.
Common questions SaaS founders ask
Does the type of SaaS product I sell matter? No. Whether you build a project management tool or a consumer app, the IRS only cares about your entity type and ownership.
Do I need to file if I had no subscribers? Yes. If you funded the company or reimbursed yourself, those are reportable transactions that require Form 5472.
What if I missed a year? Bookmate does not usually prepare past filings, but we can guide you on how to resolve missed filings correctly.
Staying ahead of filing
Keep records of all transfers between you and your company. In SaaS businesses, this often includes payments for cloud hosting, development contractors, or marketing. Tracking these makes filing Form 5472 straightforward. Filing before the deadline ensures peace of mind and avoids costly penalties.
Example for a SaaS company
A founder in France forms a Delaware single-member LLC to launch a SaaS platform. In the first year, there are no paying customers, but he wires $15,000 from his personal account to cover AWS hosting and developer contractors. Even without revenue, these transactions are reportable.
He must file Form 5472 with a pro forma 1120. Filing on time avoids the $25,000 penalty and keeps the company compliant.
How Bookmate helps SaaS founders
Bookmate specializes in federal U.S. filings for foreign-owned companies. For SaaS companies, 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.
- Ensure filings are submitted from within the U.S. so they are accepted by the IRS.
- Provide guidance on how to approach past filings if you’ve missed them.
We don’t apply for EINs or ITINs directly, but we partner with theitin.com for ITINs and recommend formation companies for EIN support. Our focus is ensuring your IRS filings are accurate, complete, and penalty-free.
Final thoughts
Running a SaaS company through a U.S. entity as a foreign founder is common, but IRS compliance is essential. The type of software you sell doesn’t matter—your entity structure does. If you are a foreign owner of a single-member LLC or corporation, Form 5472 is almost always required. Even without subscribers, filing is necessary if there were owner-related transactions.
Bookmate helps SaaS founders worldwide stay compliant, so you can focus on building your software instead of worrying about IRS deadlines.
Learn more at trybookmate.co or book a consultation today.
