Update to Corporate Transparency Act and the Beneficial Ownership Information Reporting
Further to the recent article on the US Corporate Transparency Act – compliance, exemptions and penalties, some of the anticipated revisions to the rules came into force under an interim final rule on 21 March 2025.
Beneficial Ownership Information Reporting Requirement for US
The impact of the interim final rule is that FinCEN has removed the Beneficial Ownership Reporting Requirement for US companies and US persons. This is due to the narrowing of the definition of a reporting company. It now excludes domestic entities whereas foreign companies have a revised reporting deadline and no longer need report their US beneficial owners.
A foreign (non-US) company would only need to report to FinCEN to the extent that they have registered to do business in the US and are not otherwise exempt from filing. No filing need be made to claim an exemption, since exemptions are automatic.
The revised deadline is 30 days from the announcement, to either amend prior filings or to get the initial filing in, to the extent reporting entities are required to file.
This change has come about in recognition of the burden that the reporting requirements place on businesses. Congress views foreign-owned and foreign-controlled entities as potentially having heightened risks to national security. This was recognised in the original drafting, if one considers the exemption criteria for both assisting both tax exempt and inactive entities, both effectively denied the exemptions where there were non-US owners.
An interim final rule is subject to variation on review of comments. Interested parties have 60 days from the announcement of the interim rules to make comments. On review of comments, we expect a final rule to be announced later this year.
If you would like to know more about the Corporate Transparency Act and the Beneficial Ownership Information Report (BOIR), including the detailed criteria of exemptions, please contact our specialist US-UK tax service team.
