Fillable Schedule P (Form 1120-Fsc) - Transfer Price Or Commission (Page 2 of 3) in pdf

Schedule P (Form 1120-FSC) (Rev. 9-2017)

Page

General Instructions

Specific Instructions

b. Aggregate on tabular schedule. The

FSC may choose to aggregate its

Item A—Product or Product Line.

transactions on a tabular schedule rather

Purpose of Schedule

Enter the product or product line that

than on Schedule P. To do so, file one

Use Schedule P to figure an allowable

meets one of the two standards below.

Schedule P, entering only the taxpayer’s

transfer price to charge the FSC or an

name and employer identification

1. The principal product based on the

allowable commission to pay to the FSC

number (EIN) at the top of Schedule P.

North American Industry Classification

under the administrative pricing rules

Also, check box 1b. Attach a tabular

System (NAICS) (see the last page of the

discussed below. The transfer price or

schedule to the partially completed

Instructions for Form 1120-FSC).

commission is used to allocate foreign

Schedule P, reporting all information as if

2. A recognized industry or trade use.

trading gross receipts from the sale of

a separate Schedule P were filed for

export property or from certain services

each aggregate of transactions

Note: If the FSC used the Standard

between the FSC and its related

described in 1a above. Also see Format

Industrial Classification (SIC) codes for

supplier.

of tabular schedules on page 3.

Schedule P in prior tax years, it may

complete item A based on the SIC codes

Related supplier. Under Regulations

Note: To be eligible for either of the

for the current tax year.

section 1.482-1(a), a related supplier is

aggregate reporting formats described

an entity that is owned or controlled

above in 1a or 1b, the FSC and its

Item B—Basis of Reporting. The FSC

directly or indirectly by the same

related supplier must maintain a

must indicate the basis on which the

interests as the FSC.

supporting schedule that contains all

amounts on Schedule P were

information that would be reported if a

determined using either the transaction-

Filing the Schedule

separate Schedule P were filed for each

by-transaction basis or an election to

transaction. The supporting schedule

group transactions.

File the schedule for an FSC that has

should not be filed with the Schedule P.

foreign trading gross receipts during the

Except for certain small FSCs electing

tax year from:

c. Tabular schedule of transactions.

to group transactions (discussed below),

Instead of aggregate reporting, the FSC

FSCs should not file a separate

• The resale of export property or from

may choose to report transactions on a

Schedule P for each transaction or each

certain services, or

tabular schedule. File one Schedule P,

group of transactions.

• The disposition of export property or

entering only the taxpayer’s name and

1. Transaction-by-transaction. If the

from services in which the FSC served

EIN at the top of Schedule P. Also,

FSC makes pricing determinations

as commission agent for a related

check box 1c. Attach a tabular schedule

based on each transaction rather than an

supplier.

to the partially completed Schedule P,

election to group transactions, check

reporting all information as if a separate

When Not To File

box 1a, box 1b, or box 1c depending on

Schedule P were filed for each

the FSC’s preferred reporting format.

transaction. Also see Format of tabular

Do not complete Schedule P (or an

a. Aggregate on Schedule P. If the

schedules on page 3.

alternate format) in the following three

FSC chooses to aggregate its

situations.

2. Group of transactions. The FSC’s

transactions on one or more Schedules

1. The section 482 method of transfer

related supplier may elect to group

P, check box 1a.

transactions by product or product line

pricing is used. If the 23% and 1.83%

• Aggregate on one Schedule P those

in making pricing determinations. The

methods (see the instructions for

transactions for which the same

grouping of transactions applies to all

Sections B and C on page 3) do not

administrative pricing method is applied,

transactions completed during the tax

apply to a sale or if the related supplier

does not choose to use them, the

provided all the transactions are

year for that product or product line. Do

not group sale and lease transactions.

transfer price for a sale by the related

included in the same product or product

supplier to the FSC is figured on the

line indicated in item A.

To make the election, complete one

basis of the sales price actually charged

• Aggregate on separate Schedules P

Schedule P, entering only the taxpayer’s

but is subject to section 482 and its

those transactions for which the same

name and EIN at the top of Schedule P.

regulations and to Temporary

pricing method is applied in each

Also, check box 2 of item B and attach a

Regulations section 1.925(a)-1T(a)(3)(ii).

tabular schedule to the partially

separate product line.

completed Schedule P, reporting all

2. The arm’s-length pricing method is

If a different pricing method is applied

information as if a separate Schedule P

used. If the transaction is with an

to some of the transactions in one or

were filed for each group of transactions

unrelated supplier, the FSC bases its

more of the separate product lines,

profit on the arm’s-length price.

(see Format of tabular schedules on

additional Schedules P must be filed.

page 3).

3. Transactions are incomplete at the

Example. If the 23% of combined

Note: If a grouping basis is elected,

end of the year. If export property

taxable income method applies to

aggregate reporting is not permitted.

bought by the FSC from the related

transactions in three separate product

supplier during the tax year is unsold by

lines (as indicated in item A), the FSC

Attach Schedule P to Form 1120-FSC.

the end of the FSC’s tax year or the

would file three aggregate Schedules P.

Once the election is made, grouping

related supplier’s tax year in which the

redeterminations are permitted no later

However, if the FSC uses the 1.83% of

property was transferred, the 23% and

foreign trading gross receipts method for

than 1 year after the due date of the

1.83% methods cannot be used.

some of the transactions in one of the

FSC’s timely filed (including extensions)

Instead, the transfer price of the property

product lines, the FSC would file four

Form 1120-FSC. For details, see

bought by the FSC is the supplier’s cost

aggregate Schedules P.

Regulations section 1.925(a)-1(c)(8).

of goods sold for the property. See

Small FSC. If the FSC elected to be a

Temporary Regulations section

small FSC under section 922(b) and has

1.925(a)-1T(c)(5)(i)(C) for rules regarding

foreign trading gross receipts of $5

the transfer price of property resold

million or less for the tax year, the small

during the subsequent tax year.

FSC may file a separate Schedule P for

each group of transactions instead of

filing a tabular schedule.

Schedule P (Form 1120-Fsc) - Transfer Price Or Commission Page 2

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