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Foreign-controlled domestic corporations, 2012.

For Tax Year 2012, some 83,814 foreign-controlled domestic corporations (FCDCs) collectively reported $4.7 trillion of receipts and $12.3 trillion of assets. (1) While Federal income tax returns for these corporations accounted for just 1.4 percent of all United States (U.S.) corporate returns, FCDCs made up 16.1 percent of total receipts and 14.5 percent of total assets for the year. (2)

Foreign business activity in the U.S. can take several forms, including corporations. A foreign investor may own stock in a U.S. (i.e., domestic) company or one that operates in the U.S. as a branch of a foreign corporation. (3,4) FCDCs, domestic corporations "controlled" by foreign persons, are the focus of this article. This control is ownership by one foreign "person," directly or indirectly, of 50 percent or more of a U.S. corporation's voting stock, or 50 percent or more of the value of all of the corporation's stock, at any time during the accounting period. (5,6) In this context, a person is an entity, including an individual, corporation, partnership, estate, or trust. (See "Foreign person" and "Constructive ownership rules" in the Explanation of Selected Terms section of this article.)

Total receipts for FCDCs rose 2.9 percent, less than the 3.8percent growth for all corporations between 2011 and 2012. FCDCs accounted for 16.1 percent of total receipts reported by corporations in 2012, down slightly from 16.2 percent in 2011. Total receipts includes all income actually (as opposed to constructively) received by a corporation and reported to the Internal Revenue Service (IRS) for the tax year.

Net profits, or "net income (less deficit)," reported by all FCDCs for tax purposes under the Internal Revenue Code increased significantly to $167.1 billion for 2012, which was more than double the $79.8 billion for 2011. Placed in context, net profits for all corporations totaled $1.8 trillion for 2012, a 34.1-percent increase from the $1.3 trillion for 2011. FCDC net profits accounted for 9.4 percent of all net profits reported by corporations for 2012, up from 6.0 percent for the previous year.

About 41 percent (34,736) of FCDCs reported positive profits (i.e., "net income") totaling $238.9 billion with taxable income (i.e., "income subject to tax") of $174.2 billion for 2012. The U.S. tax liability (i.e., "total income tax after credits") of FCDCs was $45.2 billion for 2012, up 26.7 percent from the prior year. In comparison, the U.S. tax liability reported on all corporate returns was $267.9 billion for 2012, up 21.3 percent from 2011. FCDCs accounted for 16.9 percent of the U.S. tax liability of all corporations for 2012, up from 16.2 percent for 2011.

Tax Return Forms

Foreign-controlled domestic corporations report Federal income tax information on several forms. These are: (1) Form 1120, U.S. Corporation Income Tax Return; (2) Form 1120-L, U.S. Life Insurance Company Income Tax Return; (3) Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return; (4) Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts; and (5) Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies. The FCDC statistics include data from these tax returns, unless otherwise stated. Data for all corporations include, unless otherwise stated, these same five forms plus Form 1120S, U.S. Income Tax Return for an S Corporation (for electing domestic corporations) and Form 1120-F, U.S. Income Tax Return of a Foreign Corporation (for foreign corporations with income effectively connected with a U.S. trade or business). The Statistics of Income Corporation Study includes all of these form types from which FCDC statistics are derived. (7) However, FCDCs cannot file Forms 1120-F or 1120S.

Growth of FCDCs, 1971-2012

The growth of FCDCs can be measured from the early 1970s, when a question concerning foreign ownership of corporations was first asked on the income tax return. For Tax Year 1971, the 5,154 FCDCs reported $36.7 billion of total assets and $39.2 billion of total receipts. They accounted for just 0.3 percent of returns, 1.3 percent of assets, and 2.1 percent of receipts reported by all corporations for that year (Table 1).

A 10-year period (most recent data for Tax Years 2003-2012) shows that FCDC returns have been a rather constant percentage of all corporate return filings--between 1.0 percent and 1.4 percent. Foreign-controlled domestic corporations filed 58,945 returns for 2003 and 83,814 for 2012, a 42.2-percent increase. During this period, the number of U.S. corporation income tax returns grew from 5.4 million to 5.8 million. This 8.1-percent increase in total filings of U.S. corporation income tax returns was dwarfed by the 25.9-percent increase in the number of Forms 1120S filed by S corporations that elected to be taxed through their shareholders. Form 1120S returns made up 61.9 percent of all corporation returns (3.3 million of the total 5.4 million returns) for 2003, compared to 72.0 percent of all returns (4.2 million of the total 5.8 million returns) in 2012. FCDCs are not eligible to elect to be treated as S corporations for Federal income tax purposes. (See "S corporations" in the Explanation of Selected Terms section of this article.)

The number of corporation income tax returns includes consolidated returns. These returns contain the combined financial data of two or more corporations in which a common parent corporation owns at least 80 percent of the stock of at least one member of the group. Additionally, at least 80 percent of the stock of each other member of the group is owned within the group. For the purposes of this study, the IRS Statistics of Income Division treated a consolidated return filed by a common parent as a single unit, with each statistical item representing the combined data of the affiliated group.

FCDCs, like many other corporations, could elect to file consolidated returns for affiliated groups of domestic corporations. For 2012, FCDCs filed 6,423 consolidated returns, accounting for 7.7 percent of all FCDC returns. These returns represented the majority of economic activity reported by all FCDCs. Specifically, they accounted for $10.7 trillion of assets (87.4 percent of the total for all FCDCs), $4.0 trillion of receipts (84.3 percent of the total), $149.1 billion of net profits (89.2 percent of the total), $143.1 billion of taxable income (82.2 percent of the total), and $36.0 billion of total income tax after credits (79.6 percent of the total).To the extent that FCDCs filed consolidated income tax returns, the data included in this article actually represent more corporations than the stated number of returns.

The growth of foreign investment in the U.S. by foreign-controlled domestic corporations during the last 10 years is evident in most of the financial items. (8) In particular, the FCDC assets rose 99.0 percent between 2003 ($6.2 trillion) and 2012 ($12.3 trillion). In comparison, assets reported on all U.S. corporation income tax returns rose 58.4 percent between 2003 ($53.6 trillion) and 2012 ($85.0 trillion). (9) As a result, the percentage of total corporate assets accounted for by FCDCs increased from 11.5 percent for 2003 to 14.5 percent for 2012 (Figure A).

Of the $12.3 trillion of assets reported by the 83,814 FCDCs for 2012, a small number of corporations accounted for a very large share of the assets. There were 450 FCDCs that each reported assets totaling $2.5 billion or more. Collectively, these corporations accounted for the largest amount ($10.4 trillion) and share (84.4 percent) of FCDC assets for the year.

Total receipts of FCDCs increased by 83.8 percent between 2003 ($2.6 trillion) and 2012 ($4.7 trillion), compared to a 42.1-percent increase for all corporations between 2003 ($20.7 trillion) and 2012 ($29.4 trillion). As a result, the share of the receipts reported on all corporate returns attributed to FCDCs increased from 12.4 percent for 2003 to 16.1 percent for 2012.

Receipts, Deductions, and Profits

A corporation's total receipts include all income "actually" received during the year. These receipts include business receipts, as well as investment and incidental income. Business receipts are gross operating receipts from sales and operations and frequently make up most of a corporation's total receipts. For 2012, nearly 91 percent of the total receipts reported by domestic corporations controlled by a foreign person consisted of business receipts. (See "Total receipts" and "Business receipts" in the Explanation of Selected Terms section.) Investment income includes interest, dividends, and gains on the sale or exchange of both capital and noncapital assets. Interest, in turn, includes both taxable interest from all sources and nontaxable interest on State and local government obligations. Dividends include those received from both domestic and foreign corporations.

A domestic corporation, whether controlled by a foreign person or not, could have business activities in the United States and foreign countries. The estimates for total receipts include business activities in the U.S. and certain foreign activities as reported on tax returns of domestic corporations. The latter include the receipts of foreign branch operations of domestic companies and dividends remitted to U.S. corporations by their foreign subsidiaries.

In this article, FCDC receipts and deductions do not include amounts generated by their foreign parent or other related foreign companies. However, FCDCs could have had business transactions with their related foreign companies. Receipts and deductions stemming from these transactions are included in the statistics. (10)

An FCDC transacting business with a related foreign company must determine "transfer prices" for those transactions. These include the sale and purchase of tangible goods, fees for services, interest payments on debts, leasing expenses, and royalties. How transfer prices are determined may affect the amount of receipts and deductions, as well as profits or losses (i.e., "deficits"), taxable income, and taxes reported on a FCDC's U.S. income tax return. Section 482 of the Internal Revenue Code, and the related regulations, provide guidance in determining transfer prices. In general, the objective is to use "arm's-length prices," which means prices that would be used for transactions between unrelated enterprises and determined by market forces.

All 83,814 FCDCs collectively produced $4.7 trillion of total receipts for Tax Year 2012; however, a small portion of these corporations accounted for most of this amount. There were 1,756 large corporations (defined as those that each produced at least $250 million of business receipts) that accounted for $4.1 trillion of total receipts, or over 87 percent of all FCDC receipts.

FCDCs reported $4.6 trillion of total deductions for 2012, only 1.2 percent more than that of the previous year (compared to total receipts that increased by 2.9 percent). See Figure B. Cost of goods sold made up over two-thirds of total deductions. This deduction item included the costs incurred by corporations in producing the goods or providing the services that generated their business receipts. Costs of materials used in manufacturing and of goods purchased for resale, as well as direct labor costs and a portion of overhead expenses, were included in the cost of goods sold. (See "Total deductions" and "Cost of goods sold" in the Explanation of Selected Terms section.)

It is noteworthy to look at the "gross profit" of FCDCs. Gross profit is the difference between business receipts and cost of goods sold. Two important industrial sectors for FCDCs, manufacturing and wholesale trade, accounted for most of the business receipts and cost of goods sold. In manufacturing, FCDCs reported $.78 of cost of goods sold for every dollar of business receipts, while the amount was $.75 for all other corporations classified in this sector, excluding S corporations because their income or losses are passed through to their shareholders. Thus, FCDCs as a group had smaller gross profits than other corporations, $.22 compared to $.25 for every dollar of business receipts. In wholesale trade, FCDCs as a group reported cost of goods sold of $.85 for every dollar of business receipts. The amount was slightly less ($.82) for all other corporations classified in this sector (again, excluding S corporations). As a result, FCDCs had smaller gross profits ($.15) than other wholesalers ($.18), for every dollar of business receipts. Complete income statement statistics of FCDCs are shown in Tables 24 and 25 of Statistics of Income--2012, Corporation Income Tax Returns, IRS Publication 16.

The resulting difference between total receipts and total deductions more than doubled to $157.2 billion for 2012, up from $75.1 billion for 2011. By comparison, total receipts less total deductions reported on all U.S. corporate income tax returns increased by 36 percent between 2011 and 2012.

FCDCs total receipts less total deductions equaled $157.2 billion for 2012, while net income (less deficit) amounted to $167.1 billion. Total receipts less total deductions include all income actually received by corporations, while net income (less deficit) focuses on taxable sources of corporate income, including "constructive" taxable income, which is made up of includable income from foreign corporations owned by U.S. shareholders and foreign dividend gross-up. (See "Constructive taxable income from related foreign corporations" in the Explanation of Selected Terms section for discussions of these terms.) Also, unlike total receipts less total deductions, net income (less deficit) excludes nontaxable interest on State and local government obligations. (11) For 2012, FCDCs reported $12.0 billion of constructive taxable income, and received $2.1 billion of nontaxable interest on State and local government obligations. Both components of constructive taxable income increased for 2012, especially foreign dividend income resulting from foreign taxes deemed paid, also called foreign dividend gross-up (from $3.8 billion for 2011 to $8.5 billion for 2012).

Net income (less deficit) reported by FCDCs more than doubled to $167.1 billion for 2012, up from $79.8 billion for the previous year. In comparison, net income (less deficit) reported on all corporation income tax returns increased 34 percent to $1.8 trillion for 2012, up from $1.3 trillion reported for 2011.

The total FCDC net income (less deficit) reported for 2012 ($167.1 billion) resulted from 34,736 corporations collectively reporting $238.9 billion of positive net income and 49,078 companies reporting $71.9 billion of deficits. (12) Thus, more than four out of every ten (41 percent) domestic corporations with foreign owners reported a positive net income. In comparison, nearly 61 percent of all corporations filing U.S. income tax returns reported a positive net income for the year.

The percentage of FCDCs reporting positive net income varied greatly among the different industrial groups. At the industrial sector level, the portion reporting positive net income ranged from a low of 22 percent for mining companies to a high of 89 percent for health care and social assistance companies. For the more predominant sectors of FCDCs, the percentages of profitable companies were 52 percent for manufacturing and 56 percent for wholesale trade.

Deficits amounting to $71.9 billion for 2012 could be carried back or carried forward to other tax years, under prescribed rules, to reduce the taxable income of those years. (See "Net operating loss deduction" (NOL) in the Explanation of Selected Terms section.) Net operating losses carried back to Tax Year 2012 from 2013 and beyond, and reported on Forms 1120X and 1139, are not included in the statistics shown in this article. (13) However, NOLs carried forward to Tax Year 2012 from prior years are included in the statistics and discussed in the next section.

Taxable Income and Taxes

For many corporations, taxable income (i.e., "income subject to tax") is generally equal to positive net income less statutory special deductions. (14) Statutory special deductions include deductions for net operating loss (NOL) carryovers from prior years and special deductions for dividends and other corporate attributes allowed by the Internal Revenue Code. For FCDCs in 2012, the difference between the $238.9 billion of positive net income and $174.2 billion of taxable income was, for the most part, the result of statutory special deductions. The net operating loss deduction was $62.7 billion and accounted for most (88 percent) of the $71.1 billion of total statutory special deductions. In calculating taxable income for 2012, FCDCs reduced their positive net incomes 26 percent using NOLs carried over from prior years. NOLs of taxable years prior to 2012 could first be carried back 2 years to reduce the taxable income of those years. Any remaining amounts of NOLs not used to decrease taxable income of those years, could be carried forward to offset taxable income for up to 20 years, including taxable income for 2012.

For 2012, foreign-controlled domestic corporations reported $174.2 billion of taxable income. This was the base on which $60.7 billion of income tax was computed. The $61.9 billion of total income tax before credits reported by FCDCs consisted primarily of the income tax, plus alternative minimum tax and certain other taxes. The alternative minimum tax was $1.1 billion. The remaining taxes comprised a very small part of the total.

Tax credits totaling $16.6 billion reduced the U.S. income tax liability of foreign-controlled domestic corporations from $61.9 billion to $45.2 billion for 2012. The largest credits claimed were foreign tax credits ($12.9 billion) and general business credits ($2.8 billion). Total U.S. income tax after credits ($45.2 billion) represents the tax liability as originally reported by taxpayers. However, this amount may differ from the actual income tax collected and the final income tax liability of corporations for the year. The originally reported tax liability does not take into account either: (1) IRS adjustments made as a result of tax examinations or enforcement activities, or (2) amended or superseded returns filed by the corporations. Among other reasons, corporations could file amended returns to use carryback provisions for net operating losses and unused foreign tax and general business credits earned in future tax years.

The percentage of FCDCs reporting U.S. tax liabilities (i.e., total income tax after credits) for 2012 was 27.9 percent, down from 31.4 percent for 2011. However, the amount of tax liability reported by these FCDCs increased to $45.2 billion for 2012, up 26.7 percent from $35.7 billion for 2011. (15)

Industry Characteristics

For 2012, foreign-controlled domestic corporations were involved in each of the 19 industrial sectors (treating wholesale trade and retail trade as separate sectors) listed in Figure C. However, 69 percent (58,175) of FCDCs reported primary business activities in one of four industrial sectors: (1) real estate and rental and leasing (20,315); (2) wholesale trade (19,260); (3) professional, scientific, and technical services (10,913); and (4) manufacturing (7,687). By comparison, relatively few FCDCs were primarily involved in health care and social assistance (316), utilities (207), or educational services (93). The Data Sources and Limitations section discusses how returns were classified by industry. (16)

The financial characteristics of companies often differ across industries. For instance, the relative levels of assets and receipts of companies primarily engaged in wholesale trade differ significantly from those primarily engaged in credit intermediation (e.g., commercial banks, credit card issuers, credit unions, mortgage banks, and savings institutions). FCDC wholesalers produced large amounts of receipts with relatively small amounts of assets (valued as of the end of their accounting periods), resulting in $1.63 of receipts for each dollar of end-of-year assets for 2012. By comparison, credit intermediation companies reported large amounts of assets, but relatively small amounts of receipts. These FCDCs produced only $.07 of receipts for each dollar of end-of-year assets (Table 2).

Corporations classified in the real estate and rental and leasing industrial sector reported less than 2 percent of the assets and less than 1 percent of the receipts of all FCDCs. These percentages were in sharp contrast to over 24 percent of the FCDC returns that they filed. Corporations in this sector were usually small, with reported average assets of $9.8 million and average receipts of $1.5 million.

Corporations classified as wholesalers accounted for a significant portion of the returns filed (23 percent) and total receipts produced (nearly 25 percent) for all FCDCs. However, these companies reported only 6 percent of the total FCDC assets.

For the professional, scientific, and technical services industrial sector, corporations reported only 2 percent of the assets and 3 percent of the receipts of all FCDCs. Both percentages are significantly lower than the portion of total FCDC returns (13 percent) this service sector represented. These service corporations were often small, with reported average amounts of assets of $21.6 million and receipts of $13.6 million.

Manufacturing corporations filed 9 percent of all FCDC returns for 2012. These capital-intensive, goods-producing companies accounted for far greater percentages of the total FCDC assets (23 percent) and receipts (45 percent). These corporations were often large, with reported average amounts of assets of $366.2 million and receipts of $279.3 million.

While corporations in the finance and insurance industrial sector composed only 4 percent of total returns filed by FCDCs for 2012, they accounted for the largest share of total assets (45 percent) reported for any of the industrial sectors. Additionally, finance and insurance companies accounted for 9 percent of total FCDC receipts for the year.

Management (or holding) companies contributed a significant portion of FCDC total assets (14 percent). However, this sector accounted for just 6 percent of returns filed by FCDCs and 2 percent of receipts.

For 2012, foreign-controlled domestic corporations accounted for 16.1 percent of the total receipts reported by all corporations ($29.4 trillion) and 20.8 percent of the receipts of all corporations excluding Forms 1120S and 1120-F ($22.7 trillion). Figure D includes data for all corporations except Forms 1120S and 1120-F in column 2. These data are shown because FCDCs are not eligible to file either of these forms. However, Form 1120-A data are included in column 2, even though FCDCs are unable to file this form. This is because Form 1120-A is the short version of Form 1120, which FCDCs do file.

FCDCs played disproportionately larger roles in certain industrial sectors. For instance, FCDCs produced substantial portions of the total receipts reported for wholesale trade (26.0 percent of all corporations and 38.8 percent of all corporations, except for Forms 1120S and 1120-F), manufacturing (25.2 percent and 28.0 percent), and mining (23.9 percent and 27.1 percent). Conversely, FCDC involvement in a number of other business activities was relatively low, accounting for a small percentage of receipts of companies classified in educational services (3.6 percent of all corporations and 6.1 percent of all corporations, except for Forms 1120S and 1120-F), other services (2.5 percent and 6.4 percent), and health care and social assistance (2.1 percent and 3.5 percent).

For analytical purposes, FCDC industrial data at the sector level can be broken down into more specific industrial classifications. In general, sectors are composed of major groups, which in turn are made up of minor industries. For 2012, FCDCs in 11 minor industries accounted for 50 percent or more of the total receipts of all corporations of each of those industries. Manufacturers (six) made up the largest portion of these minor industries, followed by wholesalers (two), and finance, information and mining (one each) (Figure E). The minor industry in which FCDCs accounted for the largest portion of receipts was breweries with 76 percent of the industry total receipts ($22.9 billion). FCDCs primarily involved in the manufacture of audio and video equipment followed with 64 percent of the industry receipts ($28.9 billion), and FCDCs dealing in commodity contracts and brokerage also had 64 percent of the industry receipts ($4.2 billion). Of the 11 minor industries, the manufacture of motor vehicles and parts accounted for the highest amount of receipts ($714.5 billion), followed by wholesalers of electrical and electronic goods ($408.1 billion), and wholesalers of motor vehicles and parts ($275.0 billion). FCDCs produced between 51 and 53 percent (rounded) of the receipts in each of these industries.

Country Characteristics

Persons (including individuals, corporations, and other entities) resident in any country throughout the world can control U.S. corporations. As reported on the U.S. income tax returns of FCDC's, a country represents the geographic location of the foreign owner's place of residence in the case of individuals, and place of incorporation, organization, creation, or administration in the case of corporations or other entities. A foreign corporation, or a chain of related foreign corporations, is frequently the owner of a U.S. subsidiary corporation. Because a foreign corporation in the chain of related companies that directly owns the stock of a U.S. subsidiary may be located in a country other than the country of the ultimate owner, the country reported on the tax return may not necessarily reflect the country of the ultimate owner. (See the Data Sources and Limitations section of this article for a brief discussion of the possible limitations of the data classified on a country basis.)

The United Nations shows nearly 200 separate countries or areas in the world. (17) For 2012, residents of 42 countries made up 89 percent of the domestic corporations classified as 50-percentor-more controlled by a foreign person worldwide. The 74,627 corporations controlled by persons resident in those 42 countries accounted for nearly all FCDC financial items, including total assets, total receipts, taxable income, and total income tax after credits (Table 3).

From among these 42 countries, domestic corporations controlled by persons from just 7 countries accounted for 74 percent of the total receipts of all FCDCs. These countries, in decreasing size of receipts, are the United Kingdom, Japan, Germany, Canada, Switzerland, the Netherlands, and France (Figure F).

It is interesting to compare the top foreign countries from which persons controlled FCDCs to the top foreign countries of the Controlled Foreign Corporations (CFC) study also conducted by the Statistics of Income Division. The CFC study covers foreign corporations that are each controlled by a single U.S. corporation, i.e., one that owns more than 50 percent of its outstanding voting stock, or more than 50 percent of the value of all its outstanding stock (directly, indirectly, or constructively) for an uninterrupted period of at least 30 days during the foreign corporation's tax year. For Tax Year 2010, CFCs reported total receipts of $6.2 trillion. (18) The countries of CFC incorporation filling out the top seven positions, by decreasing size of receipts, were Canada (11.5 percent of all CFC receipts), the Netherlands (8.7 percent), the United Kingdom (8.5 percent), Bermuda (6.5 percent), Switzerland (5.5 percent), Cayman Islands (4.8 percent), and Ireland and Luxembourg (4.6 percent each). Thus, the United Kingdom, Canada, Switzerland, and the Netherlands were in the top seven countries of both the FCDC and CFC studies. Japan, Germany, and France were not in the top seven countries of the CFC study. These three countries had the following substantial differences in the percentages of total receipts between the FCDC and CFC studies: Japan (15.3 percent of FCDC receipts and 4.4 percent of CFC receipts), Germany (9.2 percent of FCDC receipts and 3.7 percent of CFC receipts), and France (6.0 percent of FCDC receipts and 2.3 percent of CFC receipts). Conversely, Bermuda, Cayman Islands, Ireland, and Luxembourg were not in the top seven countries of the FCDC study. Each of these four countries accounted for between 1.0 percent and 1.3 percent of the total FCDC receipts.

Back to focusing on the FCDC study, domestic corporations controlled by persons resident in the United Kingdom reported the highest amount of total receipts of any country ($934 billion) for 2012. These receipts represented 19.8 percent of the $4.7 trillion FCDC total (using current dollars). This percentage was substantially larger than the United Kingdom's share (15.1 percent) of the $2.6 trillion FCDC total for 2003 (again, using current dollars).

For 2012, domestic corporations with owners resident in Japan ($721 billion), Germany ($433 billion), Canada ($397 billion), Switzerland ($371 billion), the Netherlands ($364 billion), and France ($284 billion) also accounted for significant amounts of receipts. Of these six countries, Japan's portion of total receipts decreased significantly from 19.6 percent for 2003 to 15.3 percent for 2012, followed by Germany (13.8 percent down to 9.2 percent) and the Netherlands (10.6 percent down to 7.7 percent). In contrast, Canada's portion of FCDC total receipts increased from 7.5 percent for 2003 to 8.4 percent for 2012, while Switzerland's portion increased from 4.9 percent to 7.9 percent. France's portion remained the same between 2003 and 2012 at 6.0 percent.

The portion of FCDC total receipts accounted for by countries other than the largest seven increased in size over the 10year period, from 22.5 percent to 25.7 percent. For 2012, these countries included South Korea ($137 billion), Sweden ($71 billion), Australia and Italy ($62 billion each), Bermuda ($61 billion), Luxembourg ($58 billion), Cayman Islands ($54 billion), Mexico ($52 billion), Spain ($47 billion), Ireland ($46 billion), Israel ($44 billion), Brazil ($43 billion), and Belgium and Venezuela ($40 billion each).

Domestic corporations controlled by persons resident in the United Kingdom (U.K.) accounted for $2.7 trillion of assets, the largest portion held by any country, followed by Canada and Switzerland ($1.4 trillion each), Germany and Japan ($1.3 trillion each), the Netherlands ($1.2 trillion), and France ($1.1 trillion).

Although U.K.-controlled domestic corporations made up the largest share of total FCDC receipts and assets for 2012, Canadian-controlled domestic corporations filed the most tax returns (11,320), followed by Japanese-controlled domestic corporations (6,190), U.K.-controlled domestic corporations (5,568), German-controlled domestic corporations (4,807), and Mexican-controlled domestic corporations (4,378).

For 2012, the U.S. tax liability of all FCDCs was $45.2 billion, representing 1.0 percent of total receipts reported by all FCDCs ($4.7 trillion) for the year. U.K.-controlled domestic corporations reported the largest amount of U.S. tax liability ($6.2 billion), followed by Japanese-controlled corporations ($5.8 billion) and Netherlands-controlled corporations ($5.5 billion). For U.K.-controlled corporations, tax liabilities were 0.7 percent of their $934 billion of receipts. Tax liabilities as a percent of receipts were 0.8 percent for Japanese-controlled corporations, while Netherlands-controlled corporations paid 1.5 percent of their receipts in U.S. income taxes. Many factors, including differences in industrial apportionments and age apportionments (discussed later in this article), may have caused the resulting differences between countries in calculating tax as a percentage of receipts.

There are other limitations in calculating total income taxes after credits (i.e., U.S. tax liabilities) as percentages of total receipts. Some examples include nontaxable interest received on State and local government obligations, which is included in total receipts, but is not included in income subject to tax or total income tax. On the other hand, constructive taxable income from related foreign corporations is not included in total receipts, but is part of the income subject to tax calculation and, thus, might produce income tax. Net operating losses are statutory special deductions used to reduce taxable income in the current year. However, the statistics for these losses come from prior years carried forward to the current year; they are not related to the current-year total receipts statistics. Other examples of items that affect current-year U.S. tax liabilities, but have no relationship to current-year total receipts are carryovers from prior years of excess foreign tax credits and excess general business credits. Each of these items would need to be considered in a detailed study comparing total receipts and total income taxes after credits, which is not the scope of this article.

Combined Country and Industry Characteristics

There were some similarities but also important differences among the primary industrial activities of the corporations with owners from the top seven countries, when the industries that accounted for at least 10 percent of the total receipts of corporations with owners in each of these countries are examined (Figure G).

For the United Kingdom, manufacturing was the predominant industrial sector, producing 69 percent of its total $934 billion of receipts for 2012. More specifically, manufacturers of petroleum and coal products accounted for the most receipts of any major industrial group, producing $523 billion, or 56 percent of the country's total receipts.

Japanese-controlled corporations were concentrated in two industrial sectors, which produced most of the $721 billion of receipts: manufacturing (49 percent of the total) and wholesale trade (39 percent). More specifically, transportation equipment manufacturing was the leading major industrial group, producing 32 percent of the total receipts for this country. Following closely was wholesale trade of durable goods with 31 percent of the receipts.

Like those companies controlled by residents of Japan, German-controlled corporations were primarily concentrated in manufacturing, with 44 percent of the $433 billion of receipts for that country, and in wholesale trade with 23 percent. Within manufacturing, transportation equipment manufacturers (16 percent of the country total) and machinery manufacturers (12 percent) produced the most receipts. Wholesale trade of durable goods produced 20 percent of the country total. Finance and insurance (12 percent) was a third predominant industrial sector.

Canadian-controlled corporations were primarily distributed in the manufacturing (31 percent of the $397 billion of receipts for the country), finance and insurance (19 percent), and wholesale trade (18 percent) industrial sectors. More specifically, insurance carriers reported 17 percent and wholesalers of nondurable goods reported 12 percent of the total receipts.

For Switzerland, the wholesale trade sector accounted for 39 percent of the country's total receipts ($371 billion), followed by manufacturing (32 percent), and finance and insurance (17 percent). Switzerland was the only country of the top seven in which wholesale trade (not manufacturing) was the leading sector in producing receipts. More specifically, wholesale trade of nondurable goods (34 percent of the total) was the leading major industry. Another important major industry was chemical manufacturers (15 percent of the total).

For the Netherlands, manufacturing was the largest industrial sector with 38 percent of the total receipts ($364 billion), followed by finance and insurance (20 percent) and retail trade (10 percent). Chemical manufacturers and insurance carriers each reported 19 percent of the total receipts for the country, the largest portions of all the major industrial groups.

French manufacturers produced the largest percentage (47 percent) of the $284 billion of the country's receipts, followed by wholesale trade (15 percent) and finance and insurance (12 percent). More specifically, petroleum and coal products manufacturers produced 12 percent and wholesalers of durable goods produced 10 percent of the receipts for the country.

Age Characteristics

There are two groups of FCDC's based on the age of each corporation. A "new" corporation is defined as having been incorporated in 2010 or after, as reported on the FCDC's income tax return. An "old" corporation is defined as having been incorporated in or prior to 2009, or with an unknown (i.e., unreported) date of incorporation (Figure H). (19)

The year of incorporation may be somewhat unreliable as an indicator of the true age of corporations. For example, a consolidated return may include companies that fall into both the new and old categories. However, the return (including all of the financial information contained in it) was classified based on the year of incorporation of the parent company. Another example is the reorganization of an existing corporation into a new corporation, which results in a recent year of incorporation, even though it is an "old" business. An additional limitation is that the year of incorporation is difficult to verify during statistical processing because there are no other items to which it can be compared on a tax return, and recourse to other sources is not always practical. Thus, it is subject to higher levels of taxpayer reporting and data entry errors, as compared to statistical items that can be evaluated against other reported items.

For 2012, there were 23,707 returns of FCDCs incorporated in 2010 or later (Table 3). These returns of "new" corporations comprised over 28 percent of all FCDC's returns. Five industrial sectors accounted for most of these new corporations: real estate and rental and leasing (7,730 returns); wholesale trade (4,199); professional, scientific, and technical services (3,381); management of companies (1,740); and manufacturing (1,343). The major industries that accounted for the largest number of new FCDCs were real estate (7,626) and wholesale trade of durable goods (3,223).

Nearly 72 percent of FCDCs were incorporated prior to 2010 and, therefore, were considered "old" corporations. These corporations accounted for 91 percent of the FCDC assets and 94 percent of the receipts and, thus, tended to be larger than the new corporations. Of all FCDCs, old companies also reported nearly 92 percent of the net profits (i.e., net income less deficit), 90 percent of positive profits (i.e., net income), and 85 percent of deficits.

Nearly half (48 percent) of the old FCDCs reported positive profits for 2012. By comparison, only 25 percent of the new FCDCs reported positive profits. Among other factors, newer companies may have needed additional time to generate streams of receipts and they may have had more expenses (including startup costs) relative to their receipts, as compared to older companies.

Because old corporations accounted for 90 percent of the positive profits of all FCDCs, these companies also reported most of the U.S. taxable income (89 percent) and U.S. tax liabilities after credits (88 percent) of all FCDCs. The old corporations had $39.6 billion of tax liabilities after credits, equaling 0.9 percent of their total receipts. The new corporations had $5.6 billion of tax liabilities after credits, equaling 2.1 percent of their total receipts. Deductions for net operating losses of prior years (90 percent of the total $62.7 billion reported by all fCdCs) and tax credits (94 percent of the total $16.6 billion) were claimed mostly by old corporations. NOLs and tax credits reduced the amounts of U.S. tax liabilities after credits reported by FCDCs.

Summary

Foreign-controlled domestic corporations accounted for only 1.4 percent of all corporation income tax returns filed for Tax Year 2012. This percentage is much smaller than the percentages of assets (14.5 percent) and receipts (16.1 percent) that FCDCs produced.

The value of FCDC assets increased for 2012, as did the value of assets for all corporations. FCDC assets totaled $12.3 trillion for 2012, a 4.6-percent increase from the previous year. By comparison, all corporations reported a total of $85.0 trillion of assets for 2012, a 4.5-percent increase over the previous year. FCDCs accounted for 14.5 percent of total corporate assets for 2012, up very slightly from 14.4 percent for 2011.

Foreign business activity in the United States through FCDCs increased for Tax Year 2012. FCDCs reported $4.7 trillion of total receipts for the year, a 2.9-percent increase over the 2011 level. Total receipts reported on all U.S. corporation income tax returns also increased, by a larger percentage (3.8 percent). As a result, the share of total corporate receipts accounted for by FCDCs decreased from 16.2 percent for 2011 to 16.1 percent for 2012.

Manufacturing and wholesale trade, 2 of the 19 industrial sectors, generated 70 percent of the $4.7 trillion of total FCDC receipts. Manufacturers produced $2.1 trillion of receipts, while wholesalers accounted for an additional $1.2 trillion.

Domestic corporations controlled by persons in the United Kingdom reported total receipts of $934 billion, or 19.8 percent of the total FCDC receipts. In addition, FCDCs owned by persons in Japan (15.3 percent), Germany (9.2 percent), Canada (8.4 percent), Switzerland (7.9 percent), the Netherlands (7.7 percent), and France (6.0 percent) accounted for significant portions of receipts.

FCDCs increased their receipts between 2011 and 2012 by a larger percentage than that of their deductions, thereby increasing the net difference between total receipts and total deductions. Both total receipts less total deductions and net income less deficit increased 109 percent between the 2 years. The collective net income (less deficit) reported by foreigncontrolled domestic corporations increased from $79.8 billion for 2011 to $167.1 billion for 2012. To place the performance of FCDCs in context, total corporate net profits increased 34 percent, from $1.3 trillion for 2011 to $1.8 trillion for 2012. FCDCs accounted for 9.4 percent of the net profits of all U.S. corporations for 2012, up from 6.0 percent for the previous year.

The FCDC aggregate profits (i.e., net income) increased between 2011 and 2012, while aggregate deficits decreased during this period. Net income increased by 43.5 percent, from $166.5 billion to $238.9 billion. Deficits decreased by 17.1 percent, from $86.7 billion to $71.9 billion.

The U.S. tax liability of FCDCs (i.e., total income tax after credits) moved in the same direction from that of net income, increasing 26.7 percent, from $35.7 billion for 2011 to $45.2 billion for 2012. While net income increased by 43.5 percent between the 2 years, the smaller 26.7-percent increase in tax liability also reflects increases in NOLs (up 86.6 percent) and foreign tax credits (up 61.7 percent) between the 2 years.

To place the FCDC tax liability in perspective, the U.S. tax liabilities of all corporations were about 21.3 percent higher for 2012 compared to the previous year. Thus, the FCDC's share of total corporate post-credit U.S. tax liabilities increased from 16.2 percent for 2011 to 16.9 percent for 2012. These latter percentages should be considered knowing that total corporate post-credit U.S. tax liabilities include only very small amounts from S corporations, even though these corporations accounted for large portions of the number of returns filed by all corporations and to a lesser extent their accompanying total receipts (Appendix A).

Explanation of Selected Terms

The following are brief explanations of some of the terms used in this article. For more extensive definitions, see Statistics of Income--2012, Corporation Income Tax Returns, IRS Publication 16.

Alternative minimum tax--This tax was designed to ensure that a taxpayer with substantial economic income would have at least a minimum amount of income tax liability in spite of the legitimate use of exclusions, deductions, and credits. In effect, it provided a second tax system that curtailed or eliminated many of the means of reducing taxes allowed in the regular tax system and taxed the resulting alternative taxable income at a reduced rate. Small corporations and new corporations were exempt from the AMT. The AMT is included in the amounts reported for both total income tax before (and after) credits.

Balance sheets--The balance sheet data presented in this article were the amounts reported by the taxpayer as of the end of the taxpayer's accounting year. Taxpayers were instructed to provide data that agreed with their books of account, but were given very few other guidelines. Thus, the statistics for balance sheets contained more reporting variability than those for income statement and tax computation items. Since balance sheet data were from the taxpayer's books, they were normally governed by generally accepted accounting principles rather than the special rules of tax accounting. A number of steps were taken during statistical processing to reduce the variability due to taxpayer reporting practices. Misreported amounts were transferred to their proper accounts. Missing balance sheets were either supplied from reference books or statistically imputed based on other data and the company's characteristics. Some balance sheets were suppressed during statistical processing, including those for final returns of corporations going out of existence because they should have had either zero assets (if liquidating) or assets included in another corporation's return (if merging). Additionally, balance sheets of part-year returns (for the most part, by continuing corporations changing their accounting periods) were not included in the statistics because the same corporations' data could have been subject to inclusion from their full-year returns. Corporations with less than $250,000 of receipts and less than $250,000 of assets were not required to file balance sheets.

Business receipts--These receipts are, in general, the gross operating receipts of the corporation reduced by the cost of returned goods and allowances. They represent all of a corporation's receipts except investment and incidental income. Some corporations report sales and excise taxes as part of their gross receipts from sales (and deduct these taxes as part of "cost of goods sold" or as "taxes paid"); others report their receipts after adjustment for these taxes. Business receipts include rents reported by real estate operators and other corporations for which rent made up a significant portion of income. The latter include manufacturers that rented their products and companies engaged in rental services, such as lodging places and the rental of automobiles and clothing. Business receipts include such banking items as fees, commissions, credit card income, and profits from Federal funds transactions. Interest, the principal operating income of banking and other financial institutions, is excluded from business receipts, and included in the separate statistics for interest received instead. Also, premium income of most insurance companies is included in business receipts. Security dealers include profits from security trades in business receipts. Regulated investment companies and real estate investment trusts do not report business receipts; rather they report types of investment income. Business receipts also exclude gains from the sale of assets.

Constructive ownership rules--The constructive ownership of stock rules shown in Internal Revenue Code (IRC) section 318 apply in determining whether a U.S. corporation is foreign owned. These rules of attribution include separate provisions for stock owned by families, partnerships, estates, trusts, and other corporations. Regarding family members, for example, an individual is considered to own stock that is owned, directly or indirectly, by his/her spouse, children, grandchildren, or parents. However, if a corporation is owned by two or more "unrelated" foreign individuals, neither of whom owned 50 percent or more of the corporation, then that corporation was excluded from the FCDC statistics even though, together, these individuals may have met the 50-percent-or-more ownership criterion. See also, "Foreign person," defined below.

Constructive taxable income from related foreign corporations--This item is the sum of includable income from Controlled Foreign Corporations (CFCs) and foreign dividend gross-up. IRC sections 951-964 ("Subpart F") created an exception to the general rule that the earnings and profits of CFCs were subject to U.S. taxation only when the income was actually distributed to U.S. shareholders. Under Subpart F, some types of foreign income are required to be included in the income of the U.S. shareholders, even if not actually distributed. This includable income comprises passive investment income, income from sources thought especially easy to shift between tax jurisdictions, and income from sources contrary to public policy. Foreign dividend gross-up is constructive taxable income to corporations that claim a foreign tax credit. A U.S. corporation could claim a foreign tax credit for a share of the foreign taxes actually paid by its related foreign corporations. The share of foreign taxes was treated as deemed paid by the U.S. corporation. To receive credit against U.S. tax, the foreign taxes deemed paid need to be included in the corporation's worldwide income. The dividend gross-up, which is the equivalent amount of the foreign taxes deemed paid by the U.S. corporation, is included as income of the U.S. corporation. Constructive taxable income from related foreign corporations is not included in the statistics for total receipts, but is included in net income (less deficit).

Cost of goods sold--This item generally consisted of the costs incurred by corporations in producing the goods or providing the services that generated the business receipts. Included were costs of materials used in manufacturing; costs of goods purchased for resale; direct labor; and a share of overhead expenses, such as rent, utilities, supplies, maintenance, and repairs. For statistical processing purposes, however, certain items (such as advertising, amortization, bad debts, compensation of officers, depletion, depreciation, interest paid, taxes, and contributions to charitable organizations, employee benefit programs, and pension plans) reported by taxpayers on cost of goods sold schedules were transferred to their respective and separate deduction categories. Companies who produced goods or acquired goods for resale were subject to the "uniform capitalization rules" of Internal Revenue Code section 263A. Under these rules, corporations were required to capitalize direct costs and an allocable portion of most indirect costs that relate to the goods produced or acquired for resale. Costs attributable to property that is inventory are included in inventory costs, while costs attributable to other property are included in capital accounts. For insurance companies, benefits paid (e.g., the death benefits paid by life insurance companies and the losses incurred by other insurance companies) were included in the cost of goods sold. In general, finance corporations did not have any cost of goods sold.

Dividends received from domestic corporations--These dividends are included in total receipts and represent most distributions from the earnings and profits of companies incorporated in the United States. Dividend distributions among member corporations electing to file a consolidated return are eliminated from the statistics as part of the consolidated reporting of tax accounts. Thus, dividends shown for consolidated returns represent amounts received from domestic corporations that are outside the affiliated group. In general, dividends received from domestic corporations are part of the computation of the statutory special deductions from net income. See, also, "Statutory special deductions," discussed below.

Dividends received from foreign corporations--These dividends are included in total receipts and are paid from the earnings and profits of companies incorporated in foreign countries. Dividends received from foreign corporations out of U.S.source earnings and profits were usually eligible for the dividends received deduction, a part of statutory special deductions. Not eligible were dividends out of foreign-source earnings and profits. This item does not include constructive taxable income from related foreign corporations (discussed above) because it was not an actual receipt.

Foreign person--A foreign person (or entity) includes: (1) a foreign citizen or nonresident alien, (2) an individual who is a citizen of a U.S. possession (but who is not a U.S. citizen or resident), (3) a foreign corporation, (4) a foreign partnership, (5) a foreign estate or trust within the meaning of IRC section 7701(a)(31), and (6) a foreign government (or one of its agencies or instrumentalities) to the extent that it is engaged in the conduct of a commercial activity as described in IRC section 892.

Foreign tax credit--Although the United States taxes the worldwide income of U.S. persons (including corporations), foreign-source income is often taxed as well by the country in which it is earned. The foreign tax credit provisions were enacted to mitigate the potential impact of the double taxation of foreign-source income. U.S. persons are allowed a credit against U.S. income tax for income taxes paid (or accrued) to foreign countries or U.S. possessions, subject to a limitation that prevented corporations from using foreign tax credits to reduce U.S. tax liability on U.S.-source income. Foreign taxes in excess of the limitation for a given tax year could be carried back or forward to other years for prescribed periods. A corporation that claimed the foreign tax credit could not also claim a business deduction for the same foreign taxes paid. The foreign tax credit was not allowed for taxes paid to certain foreign countries whose governments were not recognized by the United States, with which the United States severed or did not conduct diplomatic relations, or which provided support for international terrorism.

General business credit--This credit consisted of many individual credits (e.g., the investment credit, research activities credit, and low-income housing credit). Each of the credits was computed separately. However, the purpose of the general business credit was to provide a uniform limitation on the amount that could be used to reduce tax liability and to establish uniform rules for carrybacks (1 year) and carryforwards (20 years).

Income subject to tax--For most corporations, income subject to tax (i.e., taxable income) consisted of (positive) net income minus statutory special deductions. However, there were special provisions in the Internal Revenue Code for determining the taxable income of insurance companies, based on changes in their reserve accounts. Also, S corporations, regulated investment companies, and real estate investment trusts generally passed their net income on so it was taxed at the shareholder level. They had limited tax liabilities (based on capital gains for S corporations and undistributed income for RICs and REITs) and, thus, small amounts of taxable income.

Income tax--This item was the amount of a corporation's tax liability calculated at the regular corporate tax rates under Internal Revenue Code section 11. The rates on taxable incomes were graduated between 15 percent and 35 percent, with some exceptions. Certain taxable income brackets were taxed at 38 percent or 39 percent rates to phase out the benefits of the lower brackets for high-income corporations. This item is included in the amounts reported for both total income tax before (and after) credits. A small number of corporations without net income had an income tax liability under special life insurance rules, including consolidated returns filing with a life insurance subsidiary. Personal service corporations were taxed at a flat rate of 35 percent on their taxable incomes. Members of controlled groups were required to apportion their tax liabilities between the group members.

Interest--This item is taxable interest, a component of total receipts. It includes interest on U.S. Government obligations, loans, notes, mortgages, corporate bonds, bank deposits, and dividends from savings and loans and mutual savings banks. This item does not include interest received from certain government obligations not subject to U.S. income tax, including those issued by States, municipalities, other local governments, the District of Columbia, and U.S. possessions.

Net income (or deficit)--This is a company's net profit or loss from taxable sources of income reduced by deductions allowed by the Internal Revenue Code. It reflects not only actual receipts, but "constructive" receipts as well (i.e., includable income from Controlled Foreign Corporations and the foreign dividend "gross-up"). Tax-exempt interest on State and local government obligations is excluded from this item, but is included in "total receipts." The deductions include ordinary and necessary business deductions, but do not include statutory special deductions. The statistics for (positive) net income are generally larger than those for "income subject to tax" because the latter is reduced by the amount of statutory special deductions, including the net operating loss deduction. In this article, for a group of returns, this item may be referred to as either "profits" (i.e., net income exceeds deficits) or "losses" (deficits exceed net income). On Form 1120, net income (or deficit) was reported on page 1, line 28, entitled "Taxable income before net operating loss deduction and special deductions."

Net operating loss deduction (NOLD)--In general, a "net operating loss" (NOL) is the excess of allowable deductions for ordinary and necessary business expenses over gross income, with certain adjustments, calculated using the laws and IRS regulations in effect for a given tax year. A NOL could be carried back 2 years to reduce the taxable income of those years. Any amount of the NOL not offset against income during that time could be carried forward to offset taxable income for a period not to exceed 20 years. The amount of the statutory net operating loss deduction (NOLD) included in the statistics of this article consists only of losses from prior years carried forward and actually used to reduce taxable income for the current (2012) tax year. Losses incurred after Tax Year 2012 and carried back to that year at a later date were not reported on the tax returns used for this article.

Net worth--This item represents the shareholders' equity in the corporation, i.e., total assets less the claims of creditors. It is the net sum of capital stock, additional paid-in capital, appropriated retained earnings, unappropriated retained earnings, and adjustments to shareholders' equity, minus the cost of treasury stock. Capital stock includes amounts of outstanding shares of both common and preferred stock. Additional paid-in capital comprises additions to the corporation's capital from sources other than earnings, including receipts from the sale of capital stock in excess of the stated value and stock redemptions or conversions. Retained earnings and profits of corporations can be appropriated (i.e., set aside for specific purposes such as for plant expansions, bond retirements, and loss reserves) or unappropriated (dividends and distributions to shareholders are paid from these funds). Adjustments to shareholders' equity can be either positive or negative, and include unrealized gains and losses on securities held "available for sale." Treasury stock is common or preferred stock originally issued by the corporation that has been reacquired, and the issuing corporation held the stock at the end of the accounting period.

Number of returns--The data contained in this article include the number of returns filed by "active" corporations (i.e., those reporting at least one item of income or deductions) for Tax Year 2012. For simplicity, the number of returns is sometimes referred to as the number of corporations. However, the actual number of corporations may be larger than the number of returns because many domestic corporations, including FCDCs, could elect to file consolidated income tax returns. S corporations and regulated investment companies (RICs) could not file consolidated returns. Consolidated income tax returns were filed by common parent corporations and contained the combined financial data of two or more affiliated domestic corporations meeting certain stock ownership requirements. Each consolidated return was treated for statistical purposes as a single unit.

Real estate investment trusts--Domestic corporations, trusts, and associations that meet certain ownership, purpose, income, and diversification requirements may elect to be taxed as real estate investment trusts (REITs). Foreign-controlled domestic corporations can be REITs. However, REITs played a much smaller role for FCDCs than for other domestic corporations (ODCs). (20) REITs generally invest in real estate and mortgages. A beneficial ownership of the trust is established through transferable shares or transferable certificates of beneficial interest. Among the income requirements, at least 95 percent of the total gross income of a REIT must come from dividends; interest; rents from real property; and gains from the sale of stock, securities, and real property; etc. Additionally, at least 75 percent of total gross income must be derived from rents from real property; interest on mortgages on real property; gains from sales of real property and mortgages; and dividends and gains from the sale of transferable shares in other REITs; etc. The tax liability of REITs is generally very low. This is because, through a statutory special deduction for dividends paid, REITs are not taxed on amounts distributed to shareholders. In general, REITs must distribute to their shareholders at least 90 percent of their taxable incomes. Such distributions are taxed to the shareholders (i.e., beneficiaries). Internal Revenue Code section 856 defines REITs.

Regulated investment companies--A regulated investment company (RIC) is a domestic corporation registered as a management company or unit investment trust under the Investment Company Act of 1940 (ICA), or elected to be treated as a business development company under the ICA, or (with exceptions) a common trust fund or similar fund. Typically, it is a mutual fund. Foreign-controlled domestic corporations can be RICs. However, RICs played a much smaller role for FCDCs than for ODCs. (20) A RIC must meet certain Internal Revenue Code requirements. This includes deriving at least 90 percent of its gross income from dividends, interest, payments related to securities loans, and gains from the sale of stock or securities, foreign currencies, or other income related to its business of investing in such stock, securities, or currencies. The tax liability of RICs is generally very low. This is because, through a statutory special deduction for dividends paid, RICs are not taxed on amounts distributed to shareholders. In general, RICs must distribute to their shareholders at least 90 percent of their taxable incomes. Such distributions are taxed at the shareholder level. Internal Revenue Code section 851 defines RICs.

S corporations--An S corporation is one that has elected to be taxed through its shareholders under Internal Revenue Code section 1362. The IRC contains restrictive criteria that a company must meet in order to qualify as an S corporation, which include: (1) 100 shareholders or less; (2) only individuals, estates, trusts, or certain exempt organizations can be shareholders; (3) no nonresident alien shareholders; and (4) only one class of stock. These companies report corporate income and deductions from their conduct of trades and businesses, but generally allocate any income or loss to their shareholders to be taxed only at the individual level. However, some S corporations are subject to certain special taxes at the corporate level. For S corporations that were previously C corporations, the corporate income tax was imposed on certain long-term capital gains, recognized built-in gains, and excess net passive income (i.e., gross receipts derived from rents, royalties, dividends, interest, annuities, or the sales of securities). S corporations comprise a very large part of the corporate population and are involved in numerous industrial activities. However, foreign-controlled domestic corporations cannot elect to be treated as S corporations. (20) Banks, life insurance companies, and affiliated group members eligible for inclusion on a consolidated return were also ineligible to be treated as S corporations.

Statutory special deductions--Statutory special deductions were in addition to ordinary and necessary business deductions. In general, net income less statutory special deductions equals income subject to tax. Statutory special deductions is the sum of: (1) deductions for net operating loss carryovers from prior years, and (2) special deductions for dividends and other corporate attributes allowed by the Internal Revenue Code. These special deductions include: (a) dividends received deductions, (b) deductions for dividends paid on certain stock of public utilities, (c) deductions for dividends paid by regulated investment companies and real estate investment trusts, (d) Internal Revenue Code section 857(b)(2)(E) deductions reported by real estate investment trusts, and (e) Code section 806(a) small life insurance company deductions.

Total assets--This item represented those assets reported in the end-of-year balance sheets of the corporations' books of account. Total assets were net amounts after reduction by accumulated depreciation, accumulated amortization, accumulated depletion, and the reserve for bad debts.

Total deductions--This item includes the cost of goods sold, the ordinary and necessary business deductions from gross income, and the net loss from sales of noncapital assets.

Total income tax before and after credits--For 2012, total income tax of FCDCs was primarily comprised of the income tax imposed on corporate income subject to tax (over 98 percent of the total tax). The alternative minimum tax accounted for most of the remaining part of the total. A small number of corporation income tax returns without net income reported amounts of income tax. In these cases, income tax resulted from special provisions of the Internal Revenue Code applicable to life insurance operations. Additionally, some taxes included in total income tax were not imposed directly on a corporation's income subject to tax, such as the recapture taxes. Thus, a small number of corporations without net income and income tax may have reported such taxes on their tax returns. These taxes were included in the statistics for total income tax. Also included in total income tax were personal holding company taxes and the taxes on undistributed net capital gains of regulated investment companies. Total income tax included an adjustment that could be either positive or negative. This adjustment was used for write-in amounts on the tax computation schedule (e.g., Schedule J of Form 1120), as well as for differences in total tax reported on the tax computation schedule and reported on the tax and payments section of the tax return (e.g., Page 1 of Form 1120). For 2012, the credits used to reduce the total income tax of FCDCs primarily included the foreign tax credit (nearly 78 percent of the $16.6 billion of total credits), the general business credit (nearly 17 percent), and the prior-year minimum tax credit (nearly 6 percent), as well as very small amounts of other credits.

Total receipts--This item includes all of the income actually (as opposed to constructively) received by a corporation and reported on its income tax return. It includes gross taxable receipts (i.e., business receipts, taxable interest, rents, royalties, most net capital gains, net noncapital gains, dividends received, and other receipts), before the deduction of cost of goods sold and ordinary and necessary business expenses. It also includes tax-exempt interest received on State and local government obligations. A domestic corporation (i.e., one incorporated in the United States), whether controlled by a foreign person or not, could have business activities in a foreign country, as well as in the United States. Thus, total receipts may include those from foreign branch operations of the U.S. company. Also, the total receipts of a domestic corporation conducting business abroad through foreign subsidiaries may include dividends remitted from those subsidiaries. However, total receipts exclude certain taxable income from related foreign corporations, which was only constructively received by the domestic corporation. Also excluded from this item are long-term capital gains of regulated investment companies, as well as taxable interest, rents, royalties, net capital gains, and dividends received from S corporations.

Total receipts less total deductions--This item differs from the "net income (less deficit)" shown in the statistics in that it includes nontaxable interest received on State and local government obligations, and excludes constructive taxable income from related foreign corporations.

Data Sources and Limitations

Period Covered

Data for Tax Year 2012 are based on returns with accounting periods ending between July 2012 and June 2013. This span, in effect, defines the tax year so the accounting periods for noncalendar years are centered at the calendar year that ended in December 2012.

The accounting periods were 12 months in length, or less for part-year accounting periods. Continuing corporations that changed their accounting periods, new corporations that existed for less than 12 months, and corporations that merged or liquidated, filed part-year returns. Because of the 12-month span for ending accounting periods, the statistics include accounting periods that began and ended within a 23-month span. For Tax Year 2012, that span was from August 2011 (the beginning of the first-included accounting period) through June 2013 (the end of the last-included accounting period). Nevertheless, most of the income and expense data are, in fact, associated with Calendar Year 2012. Of the 83,814 FCDC returns filed for Tax Year 2012, some 63,436 (nearly 76 percent of the total) had accounting periods that ended in December 2012. These returns accounted for 77 percent of both the receipts and deductions reported by all FCDCs, as well as nearly 83 percent of FCDC assets.

The sampling frame for the 2012 statistics consisted, in general, of tax returns with accounting periods that ended between July 2012 and June 2013, and that posted to the IRS Business Master File between July 2012 and June 2014. A 24-month sampling period was needed for several reasons. First, some corporations had noncalendar year accounting periods ending as late as June 2013. Second, while corporation returns must be filed within 2 1/2 months after the close of the accounting period, many corporations requested and received 6-month filing extensions. Third, normal administrative processing time lags required that the sampling process remained open until June 2014.

Returns Covered

The number of corporate income tax returns represents returns of "active" corporations, i.e., those that reported any income or deduction items. While any corporation in existence during any portion of the taxable year was required to file an income tax return (even though it may have been inactive, not having any income or deductions), the great majority of returns filed with the Internal Revenue Service were for active corporations. Partyear returns, those filed for accounting periods of less than 12 months, were included in the number of returns and other data shown in this article. To avoid double counting, data from the balance sheets of part-year returns were not included in the statistics, except for those from initial returns of newly incorporated businesses.

The target population of FCDCs included the following forms included in the SOI Corporation Study: 1120, 1120-L, 1120-PC, 1120-REIT, and 1120-RIC. FCDC statistics did not include Forms 1120-F and 1120S, which were included in the overall corporation statistics.

Sample

This article presents statistical estimates based on a probability sample stratified by form type of 11,400 unaudited tax returns selected from over 83,800 returns of active domestic corporations controlled by a foreign person and filed for Tax Year 2012. The statistics for FCDCs are based on samples of corporation income tax returns filed primarily on Form 1120 (U.S. Corporation Income Tax Return). In addition, the statistics for all FCDCs include data from the small numbers of other domestic corporation income tax returns filed on Forms 1120L (U.S. Life Insurance Company Income Tax Return), 1120-PC (U.S. Property and Casualty Insurance Company Income Tax Return), 1120-REIT (U.S. Income Tax Return for Real Estate Investment Trusts), and 1120-RIC (U.S. Income Tax Return for Regulated Investment Companies). For Tax Year 2012, the population estimates of FCDCs by form type are 83,151 Forms 1120, 227 Forms 1120-RIC, 171 Forms 1120-REIT, 67 Forms 1120-PC, and 42 Forms 1120L. (21)

Form 1120 sampled returns were stratified based on the size of total assets and the size of "proceeds" (which was used as a measure of income and was the larger of the absolute value of net income or deficit or the absolute value of "cash flow," i.e., net income plus depreciation plus depletion). Forms 1120L, 1120-RIC, 1120-REIT, and 1120-PC were sampled based solely on the size of total assets.

For 2012, the sampling rates for Forms 1120 alone (the majority of returns included in the sample) ranged from less than 1 percent to 100 percent. In general, Form 1120 returns with assets of $50 million or more, or with "proceeds" of $10 million or more, were selected for the Statistics of Income study at the 100-percent rate. For additional information on the sampling rates, see Statistics of Income--2012, Corporation Income Tax Returns.

Data Limitations

The IRS Statistics of Income (SOI) Division used several extensive quality review processes to improve data quality, beginning with weekly monitoring at the sample selection stage. This continued through the data collection, data cleaning, and data completion procedures with consistency testing and error resolution. SOI processed returns through tests to check for impossible conditions (e.g., incorrect tax data for specific types of tax forms), internal inconsistencies (e.g., items that did not add up to totals), and questionable values (e.g., banks with large amounts of cost of goods sold). Part of the review process included extensive comparisons between the current-year data and the prior-year data. SOI made a great amount of effort at every stage of processing to ensure data integrity.

Sampling Error

Because the data presented here are estimates based on samples, they may differ from the population aggregates that would have been obtained if a complete census of all income tax returns had been taken. Thus, the data are subject to sampling error. To use these data properly, the magnitude of the sampling error should be known. Coefficients of variation (CVs) are used to measure that magnitude (Figure I). The smaller the CV, the more reliable the estimate is judged to be. For this article, CVs were calculated for selected financial data of selected industrial sectors and selected countries of the foreign owners. For a general discussion of sampling procedures and CVs, see "Sampling Methodology and Data Limitations" located near the back of this issue of the Statistics of Income Bulletin.

Nonsampling Error

Nonsampling errors can be categorized as coverage errors, nonresponse errors, processing errors, or response errors. These errors can result from the inability to obtain information about all returns in the sample, differing interpretations by taxpayers of tax concepts or instructions, inability of a corporation to provide accurate information at the time of filing (data are collected before auditing), inability to obtain all tax schedules and attachments, errors in recording or coding the data, errors in collecting or cleaning the data, errors made in estimating for missing data, and failure to represent all population units.

SOI selected returns for this study based on taxpayers' responses to two questions on Forms 1120. The first question asked whether one "foreign person" owned, directly or indirectly, 25 percent or more of the filing corporation's voting stock or the total value of all the corporation's stock at any time during the tax year. If a taxpayer answered this question "Yes," then a second question asked for the percentage owned. (22) If the percentage owned fell between 50 percent and 100 percent, then the return was included in the FCDC statistics. (23) Taxpayers sometimes incorrectly answered these questions or did not answer them at all. (24) However, prior to tabulation, corporations with large amounts of assets or receipts, and changes in foreign ownership status between 2011 and 2012, were researched and their answers to questions verified. These large corporations had a dominating effect on the estimates for balance sheet, income statement, and tax items.

Each return used for the statistics had an industry code reported, or was assigned one during administrative or statistical processing, and was classified according to the North American Industry Classification System (NAICS). The industry code represented the principal business activity (i.e., the activity which accounted for the largest portion of the total receipts) of the corporation filing the return. However, a given return may summarize the activity of a company engaged in several businesses or may have been a consolidated return filed for an affiliated group of corporations that conducted different business activities. To the extent that some consolidated (and nonconsolidated) returns covered corporations that were engaged in many types of business activities, the data in this article are not entirely related to the industrial activity under which they are shown.

There is an additional limitation related to data presented by industrial classification. Companies that sell similar products may not be classified in the same industry. For instance, those FCDCs that were primarily U.S. distributors of products made in foreign countries by their parent or other related companies were classified as wholesalers. However, other domestic corporations that were also distributors may have been included in consolidated returns covering both the manufacture and distribution of similar products and classified as manufacturers.

Each return was assigned a foreign country code that identified the owner's country. For individuals, it was the owner's country of residence. For all others, it was the country in which the foreign entity was incorporated, organized, created, or administered. To the extent that a holding company or other affiliated entity was part of a chain between a U.S. subsidiary company and the ultimate foreign parent, the country data may be related to the holding company and, thus, may not be related to the foreign country of the ultimate parent.

Appendix A

Foreign-Controlled Domestic Corporations (FCDCs) and Other
Domestic Corporations (ODCs) that filed as REITs, RICs, and
S Corporations, Tax Year 2012

[Money amounts are in millions of dollars]

Type of corporation       FCDCs       ODCs
and item

Real Estate Investment
  Trusts (REITs):
Number of returns           171        1,975
Total assets             53,509    1,605,426
Total receipts            3,539      113,547
Net income (less          1,022       43,962
  deficit)
Income subject to tax         3           44
Total income tax              3           27
  after credits
Regulated Investment
  Companies (RICs):
Number of returns           227       15,257
Total assets             185,454   16,476,284
Total receipts            3,917      412,002
Net income (less          2,670      296,356
  deficit)
Income subject to tax         0          881
Total income tax              3            6
  after credits
S Corporations:
Number of returns             0    4,205,452
Total assets                  0    3,593,278
Total receipts                0    6,572,866
Total net income              0      475,998
  (less deficit)
Net income (less              0      378,357
  deficit) from a
  trade or
  business
Total income tax              0          310
  before credits

NOTE: Real estate investment trusts (REITs), regulated investment
companies (RICs), and S corpora- tions are passthrough entities.
These entities pay little or no Federal income tax at the
corporate level. By law, they are required to pass any profits or
losses to their shareholders, where they are taxed at the
individual rate.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.


(1) Data for Tax Year 2012 are based on FCDC income tax returns with accounting periods ending between July 2012 and June 2013. (See the Period Covered subsection under "Data Sources and Limitations" for additional information.) For additional Tax Year 2012 statistics covering foreign-controlled domestic corporations, see Tables 24 and 25 of Statistics of Income--2012, Corporation Income Tax Returns, IRS Publication 16 (http://www.irs.gov/uac/SOI-Tax-Stats-Corporation-Complete- Report). Statistics for tax years prior to 2012 are available in earlier editions of Publication 16. Additionally, for 2011 statistics covering FCDCs, see Hobbs, James R., "Foreign-Controlled Domestic Corporations, 2011," Statistics of Income Bulletin, Summer 2014, Volume 34, Number 1. FCDC data are also included on the IRS Website at http://www.irs.gov/uac/SOI-Tax-Stats-Foreign- Controlled-Domestic-Corporations.

(2) Total corporate data referenced throughout this article come from: (1) Statistics of Income Bulletin, Publication 1136, selected issues; (2) Statistics of Income--Corporation Income Tax Returns, Publication 16, selected years; (3) Source Book of Statistics of Income--Corporation Income Tax Returns, Publication 1053, selected years; and (4) unpublished Statistics of Income tabulations.

(3) Sections 7701(a)(4) and (5) of the Internal Revenue Code define a domestic corporation as one created or organized in the United States or under the laws of the United States or any State. A foreign corporation is "one which is not domestic."

(4) In addition to the foreign-controlled domestic corporation study discussed in this article, the Statistics of Income program conducts a separate study covering branches of foreign corporations operating in the United States. For the most recent statistics from that study, see Tables 10 and 11 that cover branch operations of foreign corporations with income "effectively connected" with a U.S. trade or business, in Statistics of Income--2012, Corporation Income Tax Returns, IRS Publication 16. Statistics for tax years prior to 2012 are available in earlier editions of Publication 16 and on the IRS Website at http://www.irs.gov/uac/SOI-Tax-Stats-Foreign-Corporations-With-U.S.-Business- Operations.

(5) This study excludes returns of domestic corporations with stock owned by a single foreign person of 49 percent or less. However, the tax forms filed by domestic corporations do indicate the presence of 25-percent to 49-percent foreign owners, and the Statistics of Income program does separately compile data on these domestic corporations. For 2012, some 5,664 returns indicated a level of foreign ownership between 25 percent and 49 percent. These companies reported $260 billion of assets, $109 billion of receipts, $7 billion of taxable income, and $2 billion of total income tax after credits. All of these amounts were small in comparison to data for the corporations with at least 50- percent foreign ownership. The FCDC study also excludes domestic corporations with only foreign "portfolio" investors. A foreign portfolio investor, having only a minimal interest in a domestic company, exerts no control over the management of a domestic corporation, except to the extent, for example, of the right to vote in corporate stockholder meetings. A foreign portfolio investor primarily seeks dividend payments, an increase in the company's stock value, or both.

(6) Returns of certain domestic companies that are effectively controlled by foreign persons, i.e., those public companies in which "control" may be exercised with as little as 10 percent to 20 percent of the stock holdings, are excluded from both the 50-percent-or-more and the 25-percent to 49-percent tabulations. Tax return forms filed by domestic corporations do not include information about foreign persons with less than 25-percent stock holdings.

(7) As a result of the Statistics of Income (SOI) sampling process, data shown in this article for "all corporations" exclude certain out-of-scope returns, such as returns for homeowners' associations (Form 1120-H), certain political organizations (Form 1120-POL), exempt farmers' cooperatives (Form 1120-C), and nonprofit corporations. For a more complete listing of the returns excluded from the SOI corporation sample, see the Description of the Sample and Limitations of the Data section of Statistics of Income--2012, Corporation Income Tax Returns. On the other hand, in addition to legally defined corporations, the Internal Revenue Code recognizes many types of businesses as corporations, including joint stock companies and unincorporated associations (e.g., certain partnerships, savings and loan associations, mutual savings banks, cooperative banks, and business trusts). These organizations possess characteristics typical of the corporate form, such as continuity of life, limited liability of owners, and transferability of shares of capital ownership. They filed Forms 1120 and were included in the SOI corporation sample.

(8) For additional information on foreign investment in the United States, see Survey of Current Business reports, produced by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA). BEA periodically produces several articles related to this subject. Electronic versions of the articles can be obtained from the Internet at www.bea.gov/international/index.htm. The data in these reports may not be directly comparable to the information shown in this article because of definitional differences, such as those relating to periods covered, and levels of foreign ownership and company consolidation.

(9) The percentage changes in the assets between 2003 and 2012 of domestic corporations controlled by foreign persons, as well as those of all corporations, may overstate the actual "change in investment." Assets are generally reported at book value on tax returns (i.e., the value at the time of acquisition). The book value of newly acquired assets is generally greater than the book value of similar assets they replaced.

(10) For the most recent detailed information on transactions between "foreign-owned domestic corporations" and their related foreign persons, see Goodwin, Isaac J., "Transactions Between Large Foreign-Owned Domestic Corporations and Related Foreign Persons, 2008," Statistics of Income Bulletin, Fall 2012, Volume 32, Number 2. The data contained in that article are not completely comparable to the data contained in this article, since they cover different periods and are for U.S. corporations owned (25 percent or more) by a foreign person. By contrast, the foreign ownership level used for the FCDC statistics shown in this article was 50 percent or more. Additionally, returns included in the "foreign-owned" study showed total receipts of $500 million or more and reported transactions with related foreign persons on Form 5472, Information Return of a 25- Percent Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Neither of these conditions was a requirement for inclusion in the FCDC study.

(11) In general, the computation of net income (less deficit) can be shown as follows:

Begin With: Total Receipts (includes Business Receipts)

Less: Total Deductions (includes Cost of Goods Sold)

Equals: Total Receipts Less Total Deductions

Plus: Constructive Taxable Income from Related Foreign Corporations (includes Includable Income from Controlled Foreign Corporations and Foreign Dividend Gross-Up)

Less: Nontaxable Interest on State and Local Government Obligations (included in Total Receipts, above)

Equals: Net Income (Less Deficit)

(12) The 49,078 companies reporting a deficit may include a small number of "break-even" companies, i.e., those whose receipts and deductions were equal.

(13) When a company carried back a deficit to a previous tax year, it could file Form 1120X, Amended U.S. Corporation Income Tax Return, or Form 1139, Corporation Application for Tentative Refund.

(14) There were certain exceptions to the relationship of positive net income minus statutory special deductions equaling taxable income. The tax bases of S corporations and life insurance companies were not defined as net income less statutory special deductions. Rather, these types of corporations computed taxable income using special provisions of the Internal Revenue Code. S corporations were usually not taxable at the corporate level and, thus, did not have taxable income. Some, however, did have a limited tax liability on capital gains. The taxable income of life insurance companies was based on changes in reserve accounts. Also, regulated investment companies and real estate investment trusts generally passed their net incomes on to be taxed at the shareholder level; but any taxable amounts not distributed were included in income subject to tax.

(15) One focus of this article is U.S. total income tax after credits. The reader might choose to focus instead on total worldwide taxes, which may be approximated by adding the foreign tax credits claimed by corporations to the U.S. tax liabilities (i.e., total income tax after credits) of these corporations. There are limitations in using this procedure, and the foreign tax credit only approximates the foreign tax liabilities of the corporations. For the most recent statistics covering corporate foreign tax credits in depth, see Luttrell, Scott, "Corporate Foreign Tax Credit, 2010," Statistics of Income Bulletin, Fall 2014, Volume 34, Number 2. In addition, foreign tax credit data are included on the IRS Website at http://www.irs.gov/uac/SOI-Tax-Stats-Corporate-Foreign-Tax-Credit-Statistics.

(16) Statistics classified by industry do have certain limitations. For example, FCDCs accounted for 26.0 percent and 25.2 percent of the receipts of all companies classified as wholesalers and manufacturers, respectively. However, these percentages may overstate the FCDC portion of wholesaling and understate the FCDC portion of manufacturing. This is because certain U.S. companies (not foreign-controlled) and their subsidiaries may have been involved in both manufacturing and wholesaling of the same product(s) and reported tax information for these activities on a single (consolidated) income tax return, which was statistically classified under the industry of its principal business activity, that being manufacturing, rather than trade. Conversely, many FCDCs acted as wholesalers in the United States for products manufactured overseas by their parent, or other related, companies. These foreign-controlled domestic companies were classified in the wholesale trade industrial sector. See the Data Sources and Limitations section for additional information about industrial classification limitations.

(17) Actually, 198 countries or areas per United Nations Statistics Division, National Accounts Official Country Data, Table 1.3, November 2013.

(18) The most recent statistics covering CFCs are for Tax Year 2010; see the IRS Website at http://www.irs.gov/uac/SOI-Tax-Stats-Controlled-Foreign-Corporations. Also see, Mahony, Lee, and Randy Miller, "Controlled Foreign Corporations, 2008," Statistics of Income Bulletin, Winter 2013, Volume 32, Number 3.

(19) Dates of incorporation are reported on Form 1120, page 1, question C. This information is also reported on Forms 1120L, 1120-PC, 1120-REIT, and 1120-RIC, in different locations.

(20) Shown in Appendix A of this article are Tax Year 2012 data for all REITs, RICs, and S corporations filed by foreign-controlled domestic corporations (FCDCs) and by other domestic corporations (ODCs).

(21) The count of 42 Forms 1120L does not include returns of life insurance companies that were filed as part of consolidated returns under IRC section 1504(c). Under this section, a nonlife insurance parent company could include a domestic life insurance subsidiary in a consolidated return. For 2012, there were 156 section 1504(c) returns included in the FCDC's collective total of 83,814. Of this number, 81 returns had a property/casualty insurance company as the largest subsidiary (based on income), another 61 returns had a noninsurance company as the largest subsidiary, and 14 returns had a life insurance company as the largest subsidiary.

(22) On Form 1120, Page 4, Schedule K, the actual questions were: "(7) At any time during the tax year, did one foreign person own, directly or indirectly, at least 25 percent of: (a) the total voting power of all classes of the corporation's stock entitled to vote, or (b) the total value of all classes of the corporation's stock?" and "(7i) If 'Yes,' enter percentage owned." The rules of attribution under IRC section 318 applied to these questions. There was an additional question used for the country distribution of these statistics, which was: "(7ii) If 'Yes,' enter owner's country."

(23) For Tax Year 2012, the great majority (70,304 returns) of FCDCs reported 100 percent foreign ownership. Additionally, 5,763 returns reported between 75 percent and 99 percent foreign ownership, 3,447 returns reported 51 percent to 74 percent foreign ownership, and 3,223 returns reported exactly 50 percent foreign ownership.

(24) The FCDC statistics include data from returns in which the first question (see footnote 22) was answered "Yes," and the second question covering percentage owned was not answered. There were 1,077 returns for Tax Year 2012 included in the FCDC data, although the exact foreign ownership percentage was not specified. These returns reported $7.3 billion of assets and $6.2 billion of receipts.

James R. Hobbs is a management official with the Special Studies Branch. This article was prepared under the direction of Barry W. Johnson, Director, Statistics of Income Division.

Table 1. Foreign-Controlled Domestic Corporations as a Percentage
of All Corporations: Selected Items for Selected Tax Years
1971-2012

[All figures are estimates based on samples-money amounts are in
millions of dollars]

Item                         1971         1990         2000

ALL CORPORATIONS              (1)         (2)          (3)

Number of returns, total   1,733,332   3,716,650    5,045,274
  Number with net income   1,063,940   1,910,670    2,819,153
Total assets               2,889,221   18,190,058   47,026,872
Total receipts             1,906,008   11,409,520   20,605,808
  Business receipts        1,763,760   9,860,442    17,636,551
  Interest received [1]      65,596      942,238    1,576,101
Total deductions           1,824,063   11,032,575   19,691,592
  Cost of goods sold       1,241,282   6,610,770    11,135,288
  Interest paid              64,697      825,372    1,271,679
Total receipts less          81,945      376,945      914,216
  total deductions
Net income (less             79,700      370,633      927,526
    deficit)
  Net income                 96,688      552,527    1,336,620
  Deficit                   -16,988     -181,894     -409,094
Income subject to tax        83,165      366,353      760,404
Total income tax             37,510      128,186      266,282
    before credits
  Income tax                 37,143      119,434      262,233
Total income tax             30,220       96,403      204,044
  after credits

FOREIGN-CONTROLLED
DOMESTIC CORPORATIONS

Number of returns,            5,154       44,113       60,609
    total
  Number with                 2,575       17,360       26,519
    net income
Total assets                 36,674    1,652,255    6,071,994
Total receipts               39,181    1,060,295    2,612,072
  Business receipts          38,043      950,083    2,253,215
  Interest                      420       67,315      180,006
    received [1]
Total deductions             38,050    1,056,921    2,549,986
  Cost of goods              28,804      709,052    1,584,513
    sold
  Interest paid                 733       77,562      186,835
Total receipts                1,132        3,374       62,085
  less total
  deductions
Net income (less              1,111        3,966       66,312
    deficit)
  Net income                  1,496       29,410      118,598
  Deficit                      -384      -25,444      -52,287
Income subject                1,344       23,704       97,515
  to tax
Total income tax                650        8,719       34,650
    before credits
  Income tax                    631        8,008       33,950
Total income tax                610        7,438       28,073
  after credits

FOREIGN-CONTROLLED
DOMESTIC
CORPORATIONS AS A
PERCENTAGE OF ALL
CORPORATIONS

Number of returns,             0.30         1.19         1.20
    total
  Number with                  0.24         0.91         0.94
    net income
Total assets                   1.27         9.08        12.91
Total receipts                 2.06         9.29        12.68
  Business receipts            2.16         9.64        12.78
  Interest                     0.64         7.14        11.42
    received [1]
Total deductions               2.09         9.58        12.95
  Cost of goods sold           2.32        10.73        14.23
  Interest paid                1.13         9.40        14.69
Total receipts less            1.38         0.90         6.79
  total deductions
Net income (less               1.39         1.07         7.15
    deficit)
  Net income                   1.55         5.32         8.87
  Deficit                      2.26        13.99        12.78
Income subject to tax          1.62         6.47        12.82
Total income tax               1.73         6.80        13.01
    before credits
  Income tax                   1.70         6.70        12.95
Total income tax               2.02         7.72        13.76
  after credits

Item                          2003         2009         2010

ALL CORPORATIONS              (4)          (5)          (6)

Number of returns, total   5,401,237    5,824,545    5,813,725
  Number with net income   2,932,115    3,148,768    3,264,726
Total assets               53,644,785   75,965,019   79,904,747
Total receipts             20,689,574   24,772,531   26,198,523
  Business receipts        18,264,394   21,584,886   23,058,235
  Interest received [1]    1,132,675    1,478,717    1,306,237
Total deductions           19,940,595   23,943,765   24,944,311
  Cost of goods sold       11,318,645   13,286,300   14,501,547
  Interest paid              818,017    1,069,664      888,206
Total receipts less          748,980      828,766    1,254,212
  total deductions
Net income (less             779,989      918,953    1,356,496
    deficit)
  Net income               1,175,609    1,614,867    1,836,377
  Deficit                   -395,620     -695,913     -479,881
Income subject to tax        699,337      894,850    1,022,175
Total income tax             243,823      313,464      358,414
    before credits
  Income tax                 241,275      310,112      354,922
Total income tax             177,517      204,996      222,969
  after credits

FOREIGN-CONTROLLED
DOMESTIC CORPORATIONS

Number of returns,            58,945       66,197       73,210
    total
  Number with                 27,269       25,158       31,473
    net income
Total assets               6,170,122    10,461,430   11,245,199
Total receipts             2,569,302    3,518,194    4,056,172
  Business receipts        2,329,930    3,147,948    3,671,712
  Interest                   102,179      175,969      161,677
    received [1]
Total deductions           2,542,193    3,487,675    3,966,077
  Cost of goods            1,652,622    2,204,868    2,655,897
    sold
  Interest paid              109,453      151,639      136,187
Total receipts                27,109       30,519       90,095
  less total
  deductions
Net income (less              31,952       36,431       99,173
    deficit)
  Net income                  92,846      152,727      174,256
  Deficit                    -60,895     -116,296      -75,083
Income subject                73,521      105,152      127,237
  to tax
Total income tax              25,971       37,783       45,078
    before credits
  Income tax                  25,607       36,631       44,404
Total income tax              19,121       28,271       33,192
  after credits

FOREIGN-CONTROLLED
DOMESTIC
CORPORATIONS AS A
PERCENTAGE OF ALL
CORPORATIONS

Number of returns,              1.09         1.14         1.26
    total
  Number with                   0.93         0.80         0.96
    net income
Total assets                   11.50        13.77        14.07
Total receipts                 12.42        14.20        15.48
  Business receipts            12.76        14.58        15.92
  Interest                      9.02        11.90        12.38
    received [1]
Total deductions               12.75        14.57        15.90
  Cost of goods sold           14.60        16.60        18.31
  Interest paid                13.38        14.18        15.33
Total receipts less             3.62         3.68         7.18
  total deductions
Net income (less                4.10         3.96         7.31
    deficit)
  Net income                    7.90         9.46         9.49
  Deficit                      15.39        16.71        15.65
Income subject to tax          10.51        11.75        12.45
Total income tax               10.65        12.05        12.58
    before credits
  Income tax                   10.61        11.81        12.51
Total income tax               10.77        13.79        14.89
  after credits

Item                          2011         2012

ALL CORPORATIONS              (7)          (8)

Number of returns, total   5,823,126    5,840,821
  Number with net income   3,384,712    3,548,701
Total assets               81,279,900   84,952,036
Total receipts             28,335,601   29,403,675
  Business receipts        25,197,648   26,029,143
  Interest received [1]    1,289,432    1,208,961
Total deductions           27,092,729   27,712,775
  Cost of goods sold       16,180,343   16,578,523
  Interest paid              860,102      814,426
Total receipts less        1,242,872    1,690,901
  total deductions
Net income (less           1,323,009    1,774,274
    deficit)
  Net income               1,829,098    2,175,015
  Deficit                   -506,089     -400,741
Income subject to tax        994,393    1,149,800
Total income tax             349,348      402,963
    before credits
  Income tax                 345,415      399,106
Total income tax             220,894      267,854
  after credits

FOREIGN-CONTROLLED
DOMESTIC CORPORATIONS

Number of returns,            76,793       83,814
    total
  Number with                 33,358       34,736
    net income
Total assets               11,732,552   12,277,447
Total receipts             4,586,774    4,721,115
  Business receipts        4,203,240    4,284,239
  Interest                   161,850      143,242
    received [1]
Total deductions           4,511,644    4,563,917
  Cost of goods            3,099,807    3,147,347
    sold
  Interest paid              134,886      126,534
Total receipts                75,129      157,198
  less total
  deductions
Net income (less              79,803      167,052
    deficit)
  Net income                 166,514      238,934
  Deficit                    -86,710      -71,882
Income subject               130,503      174,151
  to tax
Total income tax              46,252       61,851
    before credits
  Income tax                  45,500       60,707
Total income tax              35,705       45,240
  after credits

FOREIGN-CONTROLLED
DOMESTIC
CORPORATIONS AS A
PERCENTAGE OF ALL
CORPORATIONS

Number of returns,              1.32         1.43
    total
  Number with                   0.99         0.98
    net income
Total assets                   14.43        14.45
Total receipts                 16.19        16.06
  Business receipts            16.68        16.46
  Interest                     12.55        11.85
    received [1]
Total deductions               16.65        16.47
  Cost of goods sold           19.16        18.98
  Interest paid                15.68        15.54
Total receipts less             6.04         9.30
  total deductions
Net income (less                6.03         9.42
    deficit)
  Net income                    9.10        10.99
  Deficit                      17.13        17.94
Income subject to tax          13.12        15.15
Total income tax               13.24        15.35
    before credits
  Income tax                   13.17        15.21
Total income tax               16.16        16.89
  after credits

[1] Excludes nontaxable interest received on State and local
government obligations.

NOTES: Detail may not add to totals because of rounding. All
amounts are in current dollars. Tax law and tax form changes
affect the year-to-year comparability of the data. See Statistics
of Income-Corporation Income Tax Returns, selected years, for
discussions of changes affecting the comparability of the data
over time.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Table 2. Foreign-Controlled Domestic Corporations: Selected
Items, by Major Industry, Tax Year 2012 [All figures are
estimates based on samples-money amounts are in millions of
dollars]

Major industry                           Number of returns

                                 Total    With net   With total
                                           income    income tax
                                                       after
                                                      credits

                                  (1)       (2)         (3)

All industries                   83,814    34,736       23,418
  Agriculture, forestry,           525        294          212
      fishing, and hunting
    Agricultural production        405        264          182
    Forestry and logging          * 15       * 10         * 10
    Support activities           * 105       * 20         * 20
      and fishing, hunting,
      and trapping
  Mining                           896        199          171
  Utilities                        207        114           48
  Construction                   1,459        544          451
    Construction of                417         87           30
      buildings
    Heavy and civil                547         63           58
      engineering
      construction
    Specialty trade                495        395          363
      contractors
  Manufacturing                  7,687      4,031        3,028
    Food manufacturing             685        496          474
    Beverage and tobacco            68         29           25
      product manufacturing
    Textile mills and              204        188           59
      textile product mills
    Apparel manufacturing          329      * 290         * 32
    Leather and allied             * 3        * 0          * 0
      product manufacturing
    Wood product                   125         81           57
      manufacturing
    Paper manufacturing             80         45           33
    Printing and related            46         39           39
      support activities
    Petroleum and coal              31         26            d
      products manufacturing
    Chemical manufacturing         694        345          310
    Plastics and rubber            473        254          172
      products manufacturing
    Nonmetallic mineral            171         82           69
      product manufacturing
    Primary metal                  226        127          115
      manufacturing
    Fabricated metal product       429        273          215
      manufacturing
    Machinery manufacturing      1,040        668          518
    Computer and electronic        888        349          307
      product manufacturing
    Electrical equipment,          288        153          118
      appliance, and
      component manufacturing
    Transportation equipment       678        348          265
      manufacturing
    Furniture and related          150       * 44         * 44
      product manufacturing
    Miscellaneous                1,081        196            d
      manufacturing
  Wholesale and retail trade     22,796    12,023        7,987
    Wholesale trade              19,260    10,778        7,077
    Wholesale trade,             14,351     8,194        5,295
      durable goods
    Wholesale trade,             4,768      2,503        1,722
      nondurable goods
    Wholesale electronic         * 141       * 81         * 60
      markets and agents
      and brokers
    Retail trade                 3,536      1,244          910
    Motor vehicle dealers          491        461          402
      and parts dealers
    Furniture and home              98       * 75         * 40
      furnishings stores
    Electronics and                200       * 49         * 48
      appliance stores
    Building material and         * 43       * 18         * 12
      garden equipment and
      supplies dealers
    Food, beverage and             132          7            7
      liquor stores
    Health and personal            127       * 74         * 16
      care stores
    Gasoline stations             * 11          d            d
    Clothing and clothing          454         87           57
      accessories stores
    Sporting goods, hobby,       * 333          d            d
      book, and music stores
    General merchandise           * 15        * 6            d
      stores
    Miscellaneous store            659        258          168
      retailers
    Nonstore retailers             973        194          140
  Transportation and             1,810        832          475
      warehousing
    Air, rail, and water           335         88           60
      transportation
    Truck transportation           119         71         * 30
    Transit and ground           * 283        * 6            d
      passenger
      transportation
    Pipeline transportation        * 8        * 3            d
    Other transportation and       886        505          240
      support activities
    Warehousing and storage        178        159          140
  Information                    3,721      1,425          996
    Publishing industries        1,202        484          203
    Motion picture and sound       612        137          131
      recording industries
    Broadcasting (except           305       * 17         * 17
      internet)
    Telecommunications             674        257          202
      (including paging,
      cellular, satellite,
      cable and internet
      service providers)
    Data processing, hosting,      107         55         * 43
      and related services
    Other information              821        475          400
      services (including
      news syndicates,
      libraries, and
      internet publishing
      and broadcasting)
  Finance and insurance          3,225      1,626          977
    Credit intermediation          296        166          146
      Depository credit             34         25            d
        intermediation
      Nondepository credit         262        141            d
        intermediation
    Securities, commodity        1,831        880          525
      contracts, and other
      financial investments
      and related activities
    Insurance carriers and         323        178          172
      related activities
    Funds, trusts, and other       775        403          134
      financial vehicles
  Real estate and rental         20,315     5,607        2,980
      and leasing
    Real estate                  19,981     5,476        2,882
    Rental and leasing             285        114           91
      services
    Lessors of nonfinancial         48       * 16          * 8
      intangible assets
      (except copyrighted
      works)
  Professional, scientific,      10,913     4,594        3,438
    and technical services
  Management of companies        4,979      1,403        1,009
    (holding companies)
  Administrative and             1,319        494          309
      support and waste
      management and
      remediation services
    Administrative and           1,217        491            d
      support services
    Waste management and           102          3            d
      remediation services
  Educational services              93         37           25
  Health care and social           316        281          252
      assistance
    Offices of health             * 15        * 9            d
      practitioners and
      outpatient care
      centers
  Miscellaneous health             259      * 242            d
      care and social
      assistance
    Hospitals, nursing,           * 42       * 30            d
      and residential
      care facilities
  Arts, entertainment,           1,389        409          389
      and recreation
    Amusement, gambling,           259         29           14
      and recreation
      industries
    Other arts,                  1,129        380          375
      entertainment,
      and recreation
  Accommodation and              1,165        311          170
      food services
    Accommodation                  233        114           99
    Food services and              933        198           71
      drinking places
  Other services [2]               998        511          503
    Repair and maintenance         488        427          423
    Personal and laundry           238         84           80
      services

Major industry                     Total      Net worth     Total
                                   assets                 receipts

                                    (4)          (5)         (6)

All industries                   12,277,447   2,808,971   4,721,115
  Agriculture, forestry,            10,496       4,710      11,062
      fishing, and hunting
    Agricultural production          9,664       4,403      10,273
    Forestry and logging             * 522       * 272       * 626
    Support activities               * 310        * 35       * 163
      and fishing, hunting,
      and trapping
  Mining                           335,852     131,094     120,886
  Utilities                        146,758      50,068      52,282
  Construction                      52,298      11,643      46,966
    Construction of                 28,707       6,734      28,928
      buildings
    Heavy and civil                 19,299       4,132      11,602
      engineering
      construction
    Specialty trade                  4,292         777       6,436
      contractors
  Manufacturing                  2,815,087     882,823    2,146,906
    Food manufacturing              93,182      28,584     113,496
    Beverage and tobacco           103,147      16,903      35,634
      product manufacturing
    Textile mills and                6,823       2,725       6,959
      textile product mills
    Apparel manufacturing            1,466         563       2,439
    Leather and allied                * 11       * -95        * 33
      product manufacturing
    Wood product                     6,550       2,098       7,702
      manufacturing
    Paper manufacturing             14,915       6,229      15,413
    Printing and related             3,059       1,014       3,561
      support activities
    Petroleum and coal             743,634     239,155     653,711
      products manufacturing
    Chemical manufacturing         541,871     163,259     305,495
    Plastics and rubber             56,619      13,886      63,243
      products manufacturing
    Nonmetallic mineral            106,370      49,010      49,245
      product manufacturing
    Primary metal                   89,935      19,214      94,321
      manufacturing
    Fabricated metal product        53,857      17,606      47,399
      manufacturing
    Machinery manufacturing        209,914      72,054     153,923
    Computer and electronic        211,952      71,014     121,677
      product manufacturing
    Electrical equipment,           72,461      29,093      41,539
      appliance, and
      component manufacturing
    Transportation equipment       447,224     145,209     396,756
      manufacturing
    Furniture and related            5,869         833       3,619
      product manufacturing
    Miscellaneous                   46,224       4,470      30,742
      manufacturing
  Wholesale and retail trade       820,345     228,185    1,336,699
    Wholesale trade                710,810     192,311    1,160,458
    Wholesale trade,               423,357     101,937     677,264
      durable goods
    Wholesale trade,               287,110      90,314     483,115
      nondurable goods
    Wholesale electronic             * 342        * 60        * 79
      markets and agents
      and brokers
    Retail trade                   109,535      35,874     176,241
    Motor vehicle dealers            2,942         644       7,046
      and parts dealers
    Furniture and home               7,027         451       6,813
      furnishings stores
    Electronics and                  2,243        -256       7,012
      appliance stores
    Building material and            * 802       * 110       * 495
      garden equipment and
      supplies dealers
    Food, beverage and              41,292      16,125      84,451
      liquor stores
    Health and personal             13,675       6,798       8,095
      care stores
    Gasoline stations              * 5,299     * 1,240    * 21,478
    Clothing and clothing           26,180       7,893      26,477
      accessories stores
    Sporting goods, hobby,         * 1,032       * -50     * 1,156
      book, and music stores
    General merchandise              * 887       * 265     * 1,206
      stores
    Miscellaneous store              2,298         774       2,150
      retailers
    Nonstore retailers               5,859       1,879       9,862
  Transportation and                87,491      26,820      71,340
      warehousing
    Air, rail, and water            23,358       6,630      13,306
      transportation
    Truck transportation             2,458         983       5,018
    Transit and ground             * 8,881     * 1,639     * 7,233
      passenger
      transportation
    Pipeline transportation        * 6,206     * 2,105       * 966
    Other transportation and        36,739      11,118      41,238
      support activities
    Warehousing and storage          9,848       4,344       3,580
  Information                      219,477      51,870     109,759
    Publishing industries           89,377      20,653      38,464
    Motion picture and sound        43,934      10,184      13,576
      recording industries
    Broadcasting (except             3,633       1,652       1,654
      internet)
    Telecommunications              52,968       9,099      39,872
      (including paging,
      cellular, satellite,
      cable and internet
      service providers)
    Data processing, hosting,        7,581       3,693       2,871
      and related services
    Other information               21,983       6,588      13,321
      services (including
      news syndicates,
      libraries, and
      internet publishing
      and broadcasting)
  Finance and insurance          5,523,515     761,818     446,155
    Credit intermediation          373,640      39,847      26,605
      Depository credit            122,315      18,573       6,405
        intermediation
      Nondepository credit         251,325      21,274      20,200
        intermediation
    Securities, commodity        2,891,019     138,770     105,540
      contracts, and other
      financial investments
      and related activities
    Insurance carriers and       2,027,466     376,242     308,262
      related activities
    Funds, trusts, and other       231,389     206,959       5,748
      financial vehicles
  Real estate and rental           198,585      70,510      30,226
      and leasing
    Real estate                    144,503      55,194      16,539
    Rental and leasing              44,817      10,012      12,544
      services
    Lessors of nonfinancial          9,265       5,305       1,143
      intangible assets
      (except copyrighted
      works)
  Professional, scientific,        235,423      81,355     148,738
    and technical services
  Management of companies        1,676,146     462,957      78,441
    (holding companies)
  Administrative and                58,756      21,158      54,451
      support and waste
      management and
      remediation services
    Administrative and              51,037      16,707      49,078
      support services
    Waste management and             7,719       4,451       5,373
      remediation services
  Educational services               5,134       1,686       2,429
  Health care and social            23,645       7,465      15,040
      assistance
    Offices of health             * 14,708     * 5,500     * 8,392
      practitioners and
      outpatient care
      centers
  Miscellaneous health               6,414       1,631       4,557
      care and social
      assistance
    Hospitals, nursing,            * 2,523       * 334     * 2,091
      and residential
      care facilities
  Arts, entertainment,              13,556       2,979       7,829
      and recreation
    Amusement, gambling,            10,456       2,135       4,962
      and recreation
      industries
    Other arts,                      3,100         844       2,867
      entertainment,
      and recreation
  Accommodation and                 50,481      12,937      36,505
      food services
    Accommodation                   27,975      11,420       7,998
    Food services and               22,506       1,517      28,506
      drinking places
  Other services [2]                 4,403      -1,105       5,401
    Repair and maintenance           2,125         585       3,067
    Personal and laundry             2,278      -1,690       2,334
      services

Major industry                   Business      Total       Cost of
                                 receipts    deductions   goods sold

                                    (7)         (8)          (9)

All industries                   4,284,239   4,563,917    3,147,347
  Agriculture, forestry,           10,629       10,961        9,152
      fishing, and hunting
    Agricultural production         9,918       10,162        8,550
    Forestry and logging            * 615        * 613        * 550
    Support activities               * 97        * 186         * 52
      and fishing, hunting,
      and trapping
  Mining                          109,913      118,464       54,550
  Utilities                        50,070       54,771       29,967
  Construction                     45,124       47,820       38,063
    Construction of                28,036       29,323       24,681
      buildings
    Heavy and civil                10,683       11,960        8,121
      engineering
      construction
    Specialty trade                 6,405        6,537        5,261
      contractors
  Manufacturing                  2,060,236   2,081,444    1,605,963
    Food manufacturing            112,488      110,650       79,664
    Beverage and tobacco           35,242       33,801       15,005
      product manufacturing
    Textile mills and               6,845        6,811        5,290
      textile product mills
    Apparel manufacturing           2,371        2,341        1,739
    Leather and allied               * 42         * 41         * 36
      product manufacturing
    Wood product                    7,620        7,690        6,052
      manufacturing
    Paper manufacturing            15,302       14,997       11,832
    Printing and related            3,080        3,420        2,288
      support activities
    Petroleum and coal            632,961      645,030      578,694
      products manufacturing
    Chemical manufacturing        281,673      277,526      165,042
    Plastics and rubber            61,916       60,646       45,424
      products manufacturing
    Nonmetallic mineral            47,789       50,169       33,975
      product manufacturing
    Primary metal                  92,313       93,730       79,455
      manufacturing
    Fabricated metal product       46,394       46,154       33,739
      manufacturing
    Machinery manufacturing       147,848      147,189      108,365
    Computer and electronic       113,004      117,704       75,445
      product manufacturing
    Electrical equipment,          40,734       40,382       27,327
      appliance, and
      component manufacturing
    Transportation equipment      380,629      390,268      317,709
      manufacturing
    Furniture and related           3,581        3,514        2,400
      product manufacturing
    Miscellaneous                  28,403       29,383       16,481
      manufacturing
  Wholesale and retail trade     1,300,340   1,307,974    1,086,460
    Wholesale trade              1,127,928   1,135,899      962,618
    Wholesale trade,              656,646      663,396      557,368
      durable goods
    Wholesale trade,              471,224      472,428      405,249
      nondurable goods
    Wholesale electronic             * 59         * 74          * 0
      markets and agents
      and brokers
    Retail trade                  172,412      172,075      123,842
    Motor vehicle dealers           6,787        7,014        5,989
      and parts dealers
    Furniture and home              6,555        6,776        4,188
      furnishings stores
    Electronics and                 6,923        6,877        5,149
      appliance stores
    Building material and           * 493        * 495        * 360
      garden equipment and
      supplies dealers
    Food, beverage and             83,596       82,556       62,480
      liquor stores
    Health and personal             7,934        7,605        3,542
      care stores
    Gasoline stations            * 21,269     * 21,268     * 18,933
    Clothing and clothing          25,083       24,965       12,725
      accessories stores
    Sporting goods, hobby,        * 1,089      * 1,250        * 675
      book, and music stores
    General merchandise           * 1,193      * 1,210        * 741
      stores
    Miscellaneous store             1,734        2,145        1,166
      retailers
    Nonstore retailers              9,755        9,913        7,894
  Transportation and               66,431       70,190       23,550
      warehousing
    Air, rail, and water           12,802       12,699        3,619
      transportation
    Truck transportation            4,919        5,030        2,611
    Transit and ground            * 6,815      * 7,146      * 1,091
      passenger
      transportation
    Pipeline transportation         * 505      * 1,058         * 22
    Other transportation and       38,083       40,899       14,825
      support activities
    Warehousing and storage         3,308        3,358        1,383
  Information                     100,453      105,889       38,789
    Publishing industries          36,601       36,596       10,412
    Motion picture and sound       10,684       14,032        4,808
      recording industries
    Broadcasting (except              856          977          357
      internet)
    Telecommunications             37,527       38,762       17,493
      (including paging,
      cellular, satellite,
      cable and internet
      service providers)
    Data processing, hosting,       2,682        2,799          275
      and related services
    Other information              12,103       12,723        5,444
      services (including
      news syndicates,
      libraries, and
      internet publishing
      and broadcasting)
  Finance and insurance           262,507      409,727      169,919
    Credit intermediation          12,142       20,911          294
      Depository credit             1,404        5,091            0
        intermediation
      Nondepository credit         10,738       15,820          294
        intermediation
    Securities, commodity          41,018       87,529          403
      contracts, and other
      financial investments
      and related activities
    Insurance carriers and        209,309      298,818      169,214
      related activities
    Funds, trusts, and other           39        2,469            9
      financial vehicles
  Real estate and rental           20,499       29,414        3,106
      and leasing
    Real estate                     8,663       15,999          250
    Rental and leasing             10,817       12,358        2,606
      services
    Lessors of nonfinancial         1,019        1,058          249
      intangible assets
      (except copyrighted
      works)
  Professional, scientific,       141,006      144,875       43,145
    and technical services
  Management of companies           7,488       63,191          611
    (holding companies)
  Administrative and               51,793       54,361       20,987
      support and waste
      management and
      remediation services
    Administrative and             46,910       49,432       20,047
      support services
    Waste management and            4,883        4,929          939
      remediation services
  Educational services              2,325        2,293          465
  Health care and social           13,720       14,092        4,716
      assistance
    Offices of health             * 7,700      * 7,481      * 3,479
      practitioners and
      outpatient care
      centers
  Miscellaneous health              4,470        4,581        1,060
      care and social
      assistance
    Hospitals, nursing,           * 1,551      * 2,030        * 178
      and residential
      care facilities
  Arts, entertainment,              6,949        7,853        1,877
      and recreation
    Amusement, gambling,            4,570        5,032        1,147
      and recreation
      industries
    Other arts,                     2,378        2,821          730
      entertainment,
      and recreation
  Accommodation and                29,589       35,496       13,757
      food services
    Accommodation                   5,026        7,787          770
    Food services and              24,563       27,709       12,987
      drinking places
  Other services [2]                5,167        5,102        2,270
    Repair and maintenance          2,986        3,026        1,873
    Personal and laundry            2,181        2,076          397
      services

Major industry                     Total        Net        Net
                                  receipts     income    income
                                 less total    (less
                                 deductions   deficit)

                                    (10)        (11)      (12)

All industries                     157,198    167,052    238,934
  Agriculture, forestry,               101        143       391
      fishing, and hunting
    Agricultural production            111        154       364
    Forestry and logging              * 12       * 12      * 19
    Support activities               * -23      * -23       * 8
      and fishing, hunting,
      and trapping
  Mining                             2,422      3,463    15,178
  Utilities                         -2,489     -2,432       554
  Construction                        -854       -817     1,153
    Construction of                   -395       -377       498
      buildings
    Heavy and civil                   -358       -360       457
      engineering
      construction
    Specialty trade                   -101        -80       198
      contractors
  Manufacturing                     65,463     70,958    91,829
    Food manufacturing               2,846      2,870     3,431
    Beverage and tobacco             1,833      1,840     1,991
      product manufacturing
    Textile mills and                  148        155       220
      textile product mills
    Apparel manufacturing               99         99     * 134
    Leather and allied                * -8       * -8       * 0
      product manufacturing
    Wood product                        12         12       242
      manufacturing
    Paper manufacturing                416        421       568
    Printing and related               141        141       171
      support activities
    Petroleum and coal               8,681     11,379    17,617
      products manufacturing
    Chemical manufacturing          27,969     29,349    30,890
    Plastics and rubber              2,597      2,682     2,934
      products manufacturing
    Nonmetallic mineral               -924       -872     1,344
      product manufacturing
    Primary metal                      591        596     1,635
      manufacturing
    Fabricated metal product         1,245      1,291     2,208
      manufacturing
    Machinery manufacturing          6,734      7,096     8,385
    Computer and electronic          3,973      4,498     7,131
      product manufacturing
    Electrical equipment,            1,157      1,263     1,861
      appliance, and
      component manufacturing
    Transportation equipment         6,488      6,563     8,808
      manufacturing
    Furniture and related              105        105     * 163
      product manufacturing
    Miscellaneous                    1,358      1,477     2,095
      manufacturing
  Wholesale and retail trade        28,725     29,856    37,714
    Wholesale trade                 24,559     25,583    31,933
    Wholesale trade,                13,867     14,590    17,838
      durable goods
    Wholesale trade,                10,687     10,989    14,071
      nondurable goods
    Wholesale electronic               * 4        * 4      * 23
      markets and agents
      and brokers
    Retail trade                     4,166      4,272     5,781
    Motor vehicle dealers               32         32        73
      and parts dealers
    Furniture and home                  36         36     * 167
      furnishings stores
    Electronics and                    135        135     * 213
      appliance stores
    Building material and            * [1]      * [1]       * 3
      garden equipment and
      supplies dealers
    Food, beverage and               1,895      1,897     2,291
      liquor stores
    Health and personal                490        490     * 518
      care stores
    Gasoline stations                * 210      * 304         d
    Clothing and clothing            1,513      1,521     1,990
      accessories stores
    Sporting goods, hobby,           * -94      * -94         d
      book, and music stores
    General merchandise               * -3       * -3      * 46
      stores
    Miscellaneous store                  5          5        62
      retailers
    Nonstore retailers                 -51        -51       108
  Transportation and                 1,150      1,191     2,266
      warehousing
    Air, rail, and water               606        620       853
      transportation
    Truck transportation               -12        -12        79
    Transit and ground                * 87       * 87     * 136
      passenger
      transportation
    Pipeline transportation          * -92      * -92      * 28
    Other transportation and           339        367       894
      support activities
    Warehousing and storage            222        222       275
  Information                        3,870      3,947     6,667
    Publishing industries            1,867      1,909     2,905
    Motion picture and sound          -455       -446       452
      recording industries
    Broadcasting (except               677        677     * 777
      internet)
    Telecommunications               1,110      1,115     1,424
      (including paging,
      cellular, satellite,
      cable and internet
      service providers)
    Data processing, hosting,           72         80       166
      and related services
    Other information                  598        611       944
      services (including
      news syndicates,
      libraries, and
      internet publishing
      and broadcasting)
  Finance and insurance             36,428     36,118    41,530
    Credit intermediation            5,694      5,660     5,856
      Depository credit              1,314      1,245     1,311
        intermediation
      Nondepository credit           4,380      4,415     4,545
        intermediation
    Securities, commodity           18,011     18,298    19,771
      contracts, and other
      financial investments
      and related activities
    Insurance carriers and           9,445      8,881    12,255
      related activities
    Funds, trusts, and other         3,279      3,279     3,649
      financial vehicles
  Real estate and rental               811        843     4,301
      and leasing
    Real estate                        540        587     3,287
    Rental and leasing                 187        171       904
      services
    Lessors of nonfinancial             84         85     * 110
      intangible assets
      (except copyrighted
      works)
  Professional, scientific,          3,863      4,207     7,681
    and technical services
  Management of companies           15,250     16,879    23,392
    (holding companies)
  Administrative and                    90        151     1,958
      support and waste
      management and
      remediation services
    Administrative and                -354       -294     1,445
      support services
    Waste management and               444        444       513
      remediation services
  Educational services                 137        137       209
  Health care and social               949        949     1,142
      assistance
    Offices of health                * 912      * 912     * 938
      practitioners and
      outpatient care
      centers
  Miscellaneous health                 -24        -24     * 127
      care and social
      assistance
    Hospitals, nursing,               * 61       * 61      * 78
      and residential
      care facilities
  Arts, entertainment,                 -24        -15       298
      and recreation
    Amusement, gambling,               -70        -61       135
      and recreation
      industries
    Other arts,                         46         46       163
      entertainment,
      and recreation
  Accommodation and                  1,009      1,120     2,212
      food services
    Accommodation                      211        213     1,038
    Food services and                  797        906     1,174
      drinking places
  Other services [2]                   298        354       460
    Repair and maintenance              40         43        96
    Personal and laundry               259        311       364
      services

Major industry                   Deficit   Income     Total income tax
                                           subject
                                           to tax    Before     After
                                                     credits   credits

                                  (13)      (14)      (15)       (16)

All industries                   -71,882   174,151   61,851    45,240
  Agriculture, forestry,           -247       189        66        49
      fishing, and hunting
    Agricultural production        -210       162        57        41
    Forestry and logging           * -7      * 19       * 7       * 5
    Support activities            * -31       * 8       * 3       * 3
      and fishing, hunting,
      and trapping
  Mining                         -11,714   13,536     4,892     2,252
  Utilities                      -2,986       371       132       118
  Construction                   -1,969       725       214       188
    Construction of                -875       290        61        60
      buildings
    Heavy and civil                -817       315       111        91
      engineering
      construction
    Specialty trade                -278       120        42        38
      contractors
  Manufacturing                  -20,870   75,640    26,651    18,041
    Food manufacturing             -561     2,919     1,024       978
    Beverage and tobacco           -151     1,975       691       676
      product manufacturing
    Textile mills and               -65       182        63        59
      textile product mills
    Apparel manufacturing         * -35     * 119      * 42      * 41
    Leather and allied             * -8       * 0       * 0       * 0
      product manufacturing
    Wood product                   -229       134        47        47
      manufacturing
    Paper manufacturing            -147       275       100        74
    Printing and related            -29       121        43        41
      support activities
    Petroleum and coal           -6,238    16,211     5,684         d
      products manufacturing
    Chemical manufacturing       -1,541    26,549     9,308     7,353
    Plastics and rubber            -252     1,787       757       709
      products manufacturing
    Nonmetallic mineral          -2,216       932       334       256
      product manufacturing
    Primary metal                -1,039     1,314       461       437
      manufacturing
    Fabricated metal product       -917     1,958       677       632
      manufacturing
    Machinery manufacturing      -1,289     7,441     2,604     2,223
    Computer and electronic      -2,634     3,761     1,319       837
      product manufacturing
    Electrical equipment,          -598     1,310       458       327
      appliance, and
      component manufacturing
    Transportation equipment     -2,245     6,691     2,351     1,974
      manufacturing
    Furniture and related         * -58     * 155      * 54      * 49
      product manufacturing
    Miscellaneous                  -618     1,806       634         d
      manufacturing
  Wholesale and retail trade     -7,858    29,429    10,279     8,603
    Wholesale trade              -6,349    23,989     8,376     6,847
    Wholesale trade,             -3,248    12,250     4,281     3,486
      durable goods
    Wholesale trade,             -3,082    11,726     4,091     3,357
      nondurable goods
    Wholesale electronic          * -19      * 13       * 4       * 4
      markets and agents
      and brokers
    Retail trade                 -1,509     5,440     1,903     1,756
    Motor vehicle dealers           -42        59        19        19
      and parts dealers
    Furniture and home           * -130     * 158      * 55      * 36
      furnishings stores
    Electronics and               * -78     * 212      * 74      * 72
      appliance stores
    Building material and          * -4       * 1     * [1]     * [1]
      garden equipment and
      supplies dealers
    Food, beverage and             -394     2,222       778       687
      liquor stores
    Health and personal           * -28     * 456     * 159     * 150
      care stores
    Gasoline stations                 d         d         d         d
    Clothing and clothing          -468     1,843       646       629
      accessories stores
    Sporting goods, hobby,            d         d         d         d
      book, and music stores
    General merchandise           * -50      * 46      * 16         d
      stores
    Miscellaneous store             -57        60        19        19
      retailers
    Nonstore retailers             -158        90        32        30
  Transportation and             -1,075     1,827       634       564
      warehousing
    Air, rail, and water           -234       830       290       257
      transportation
    Truck transportation            -91      * 62      * 19      * 19
    Transit and ground            * -49       * 7       * 3         d
      passenger
      transportation
    Pipeline transportation      * -121      * 28      * 10         d
    Other transportation and       -528       779       270       235
      support activities
    Warehousing and storage         -53       121        42        42
  Information                    -2,720     4,125     1,470     1,370
    Publishing industries          -996     2,170       761       685
    Motion picture and sound       -898       195        68        67
      recording industries
    Broadcasting (except         * -100     * 710     * 249     * 249
      internet)
    Telecommunications             -309       245       109       102
      (including paging,
      cellular, satellite,
      cable and internet
      service providers)
    Data processing, hosting,       -86      * 31      * 12      * 11
      and related services
    Other information              -333       775       271       256
      services (including
      news syndicates,
      libraries, and
      internet publishing
      and broadcasting)
  Finance and insurance          -5,413    16,592     6,328     5,473
    Credit intermediation          -196     3,422     1,239     1,133
      Depository credit             -66       316       127         d
        intermediation
      Nondepository credit         -130     3,107     1,113         d
        intermediation
    Securities, commodity        -1,472     5,289     1,880     1,664
      contracts, and other
      financial investments
      and related activities
    Insurance carriers and       -3,374     7,503     3,077     2,548
      related activities
    Funds, trusts, and other       -370       378       132       128
      financial vehicles
  Real estate and rental         -3,458     1,782       615       558
      and leasing
    Real estate                  -2,700     1,465         o       457
    Rental and leasing             -732       219        81        78
      services
    Lessors of nonfinancial       * -26      * 97      * 34      * 23
      intangible assets
      (except copyrighted
      works)
  Professional, scientific,      -3,474     5,329     1,858     1,456
    and technical services
  Management of companies        -6,514    19,671     6,975     5,153
    (holding companies)
  Administrative and             -1,807     1,126       404       326
      support and waste
      management and
      remediation services
    Administrative and           -1,739     1,121       393         d
      support services
    Waste management and            -68         5        11         d
      remediation services
  Educational services              -72       171        60        56
  Health care and social           -193       988       347       334
      assistance
    Offices of health             * -26     * 867     * 303         d
      practitioners and
      outpatient care
      centers
  Miscellaneous health           * -151      * 46      * 17         d
      care and social
      assistance
    Hospitals, nursing,           * -16      * 75      * 26         d
      and residential
      care facilities
  Arts, entertainment,             -313       161        55        53
      and recreation
    Amusement, gambling,           -196        43        15        14
      and recreation
      industries
    Other arts,                    -117       118        40        39
      entertainment,
      and recreation
  Accommodation and              -1,092     2,051       718       522
      food services
    Accommodation                  -825       923       324       284
    Food services and              -268     1,128       394         d
      drinking places
  Other services [2]               -106       438       150       125
    Repair and maintenance          -53        84        27        23
    Personal and laundry            -53       354       123       102
      services

* Estimate should be used with caution because of the small
number of sample returns on which it is based. d-Not shown to
avoid disclosure of information about specific corporations.
However, data are included in the appropriate totals.

[1] Value is between -$500,000 and $500,000.

[2] Includes religious, grantmaking, civic, professional, and
similar organizations, not shown separately.

NOTE: Detail may not add to totals because of rounding.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Table 3. Foreign-Controlled Domestic Corporations: Selected
Items, by Age of Corporation and Selected Country of
Foreign Owner, Tax Year 2012

[All figures are estimates based on samples-money amounts are in
millions of dollars]

Age of corporation             Number of returns          Total
and selected country                                      assets
of foreign owner       Total    With net   With total
                                 income    income tax
                                             after
                                            credits

                        (1)       (2)         (3)          (4)

All foreign-           83,814    34,736       23,418    12,277,447
  controlled
  domestic
  corporations
AGE OF CORPORATION
Old corporations:
  Number or amount     60,108    28,785       19,107    11,150,887
Percentage of all       71.7       82.9         81.6         90.8
  corporations
New corporations:
  Number or amount     23,707     5,951        4,311    1,126,560
  Percentage of all     28.3       17.1         18.4          9.2
    corporations
SELECTED COUNTRY
  OF FOREIGN OWNER
Selected countries,    74,627    31,877       21,760    12,210,906
  total
Percentage of all       89.0       91.8          92.9         99.5
  countries
Selected countries:
  Argentina            1,616         560          560        1,265
  Australia            2,311        836          539      179,262
  Austria                506        271          249       14,341
  Belgium                433        244          216       45,742
  Bermuda                469        119          101      154,572
  Brazil               1,625        617          341       39,347
  British Virgin       3,720        723          469       34,496
    Islands [1]
  Canada               11,320     4,924        3,943    1,392,332
  Cayman Islands       2,490        975          643      110,581
  China                3,166      1,156          352       66,454
  China (Taiwan)         652        406          280       17,664
  Cyprus                 158         58           39        6,804
  Denmark                449        159          111       22,986
  Finland                171         98           78       20,547
  Former Soviet          491         47         * 20       10,880
    Union [2]
  France [3]           2,678        998          603    1,114,917
  Germany              4,807      2,328        1,610    1,276,169
  Hong Kong              978        503          329       22,503
  Hungary                153         25            d        2,326
  India                1,649      1,061          710       26,643
  Ireland                648        263          224      108,270
  Isles of Man,          610        202          137       89,330
    Jersey, and
    Guernsey
  Israel [4]           1,281        649          371       66,551
  Italy                2,992      1,356          630       66,863
  Japan                6,190      3,178        2,033    1,277,044
  Liechtenstein          247         72           48        4,738
  Luxembourg             531        301          232      102,109
  Mexico               4,378      1,754        1,402       57,448
  Netherlands          1,783      1,158          699    1,187,148
  New Zealand            153         63           59       27,325
  Norway                 476        232          107       51,078
  Panama               1,956        612          266       10,639
  Portugal [5]           183       * 72            d       10,967
  Puerto Rico             21          3            d       10,675
  Saudi Arabia            95       * 16            d        9,265
  Singapore              344        100           83       37,036
  South Korea,         1,904        698          614       83,778
    Republic of
  Spain                1,653        329          189      264,504
  Sweden                 626        236          181       75,509
  Switzerland          1,629      1,061          797    1,403,707
  United Kingdom       5,568      2,484        1,992    2,685,077
  Venezuela            1,517        930          392       22,014

Age of corporation     Net worth     Total     Business      Total
and selected country               receipts    receipts    deductions
of foreign owner

                          (5)         (6)         (7)         (8)

All foreign-           2,808,971   4,721,115   4,284,239   4,563,917
  controlled
  domestic
  corporations
AGE OF CORPORATION
Old corporations:
  Number or amount     2,565,405   4,449,620   4,054,354   4,305,222
Percentage of all          91.3        94.2        94.6         94.3
  corporations
New corporations:
  Number or amount      243,567     271,495     229,886      258,695
  Percentage of all         8.7         5.8         5.4          5.7
    corporations
SELECTED COUNTRY
  OF FOREIGN OWNER
Selected countries,    2,789,012   4,680,710   4,246,636   4,523,743
  total
Percentage of all           99.3        99.1        99.1        99.1
  countries
Selected countries:
  Argentina                  493       1,281       1,260       1,378
  Australia              43,723      62,195      56,217       60,267
  Austria                 4,464      23,535      23,216       22,778
  Belgium                19,327      39,885      37,819       37,830
  Bermuda                44,871      61,254      53,223       57,224
  Brazil                 10,221      43,432      42,688       44,401
  British Virgin          9,641      25,818      23,925       25,888
    Islands [1]
  Canada                296,863     397,374     346,997      391,311
  Cayman Islands         37,819      53,607      46,138       54,409
  China                   7,008      34,655      33,122       35,104
  China (Taiwan)          5,522      38,929      38,512       38,138
  Cyprus                  1,252       6,129       5,657        6,120
  Denmark                 7,574      28,445      26,833       27,221
  Finland                 8,655      17,139      15,488       16,393
  Former Soviet           1,737      10,985      10,865       11,108
    Union [2]
  France [3]            327,075     284,392     254,009      271,982
  Germany               265,820     432,871     383,149      414,496
  Hong Kong               1,037      11,615      11,286       11,734
  Hungary                  -472      12,347      12,019       11,916
  India                   6,859      28,515      27,940       28,586
  Ireland                21,853      46,366      41,533       44,981
  Isles of Man,          42,300      25,430      22,678       23,113
    Jersey, and
    Guernsey
  Israel [4]             19,601      44,126      42,435       42,820
  Italy                  28,295      62,392      59,753       60,262
  Japan                 281,581     720,834     684,340      699,121
  Liechtenstein           1,430       8,361       8,229        8,120
  Luxembourg             34,172      57,856      55,122       57,119
  Mexico                 30,302      52,407      50,261       50,383
  Netherlands           275,254     364,287     310,152      342,348
  New Zealand             5,018      14,056      13,421       14,506
  Norway                 13,846      29,416      28,077       30,681
  Panama                  6,649       3,701       3,399        3,593
  Portugal [5]            5,106       2,519       2,377        2,869
  Puerto Rico             1,563       1,150         672        1,240
  Saudi Arabia            5,171      14,841      14,626       16,844
  Singapore              20,904      18,448      17,990       18,377
  South Korea,           21,012     136,602     133,225      135,729
    Republic of
  Spain                  62,838      47,605      35,746       45,115
  Sweden                  9,832      70,654      68,505       68,766
  Switzerland           129,932     370,664     323,325      346,960
  United Kingdom        668,377     934,093     840,253      903,113
  Venezuela               4,487      40,499      40,154       39,399

Age of corporation      Cost of       Total      Net income     Net
and selected country   goods sold    receipts      (less      income
of foreign owner                    less total    deficit)
                                    deductions

                          (9)          (10)         (11)       (12)

All foreign-           3,147,347      157,198      167,052    238,934
  controlled
  domestic
  corporations
AGE OF CORPORATION
Old corporations:
  Number or amount     2,995,958      144,398      152,949    213,957
Percentage of all           95.2         91.9         91.6      89.5
  corporations
New corporations:
  Number or amount       151,388       12,800       14,102    24,976
  Percentage of all          4.8          8.1          8.4      10.5
    corporations
SELECTED COUNTRY
  OF FOREIGN OWNER
Selected countries,     3,120,830      156,958      166,740   236,466
  total
Percentage of all            99.2         99.8         99.8     99.0
  countries
Selected countries:
  Argentina                  958          -97          -97       44
  Australia               28,499        1,928        2,193     5,799
  Austria                 17,948          757          765       923
  Belgium                 26,867        2,056        2,104     2,313
  Bermuda                 31,670        4,029        3,964     5,215
  Brazil                  39,069         -969         -949       721
  British Virgin          16,645          -70          -57     1,295
    Islands [1]
  Canada                 255,244        6,063        6,011    16,851
  Cayman Islands          25,673         -803         -731     4,837
  China                   29,141         -449         -406       764
  China (Taiwan)          35,244          791          791       944
  Cyprus                   4,947            9            9       104
  Denmark                 18,434        1,224        1,267     1,570
  Finland                 11,497          746          768       802
  Former Soviet            9,718         -123         -121       135
    Union [2]
  France [3]             168,952       12,409       12,710    16,178
  Germany                264,815       18,374       19,149    22,996
  Hong Kong                8,865         -119         -117       256
  Hungary                  9,248          431          484       545
  India                   16,393          -71          -61       769
  Ireland                 27,472        1,385        1,369     1,891
  Isles of Man,            8,552        2,318        2,568     3,269
    Jersey, and
    Guernsey
  Israel [4]              32,252        1,305        1,350     2,128
  Italy                   41,302        2,129        2,559     3,567
  Japan                  536,622       21,713       22,472    28,101
  Liechtenstein            6,115          242          242       322
  Luxembourg              40,365          737          791     2,073
  Mexico                  35,979        2,023        2,394     3,440
  Netherlands            213,842       21,939       25,107    27,599
  New Zealand             10,305         -450         -450        78
  Norway                  22,738       -1,265       -1,251       561
  Panama                   2,346          108           95       249
  Portugal [5]             1,924         -350         -350      * 42
  Puerto Rico                 98          -90          -86        14
  Saudi Arabia            13,622       -2,003       -2,003      * 10
  Singapore               12,747           70           75       458
  South Korea,           117,860          872          893     2,503
    Republic of
  Spain                   23,495        2,490        2,316     4,011
  Sweden                  52,266        1,887        1,938     2,334
  Switzerland            220,824       23,703       24,225    26,750
  United Kingdom         642,938       30,979       33,710    42,880
  Venezuela               37,339        1,100        1,100     1,125

Age of corporation     Deficit    Income     Total income tax
and selected country              subject
of foreign owner                  to tax    Before     After
                                            credits   credits

                         (13)      (14)      (15)      (16)

All foreign-           -71,882    174,151   61,851    45,240
  controlled
  domestic
  corporations
AGE OF CORPORATION
Old corporations:
  Number or amount     -61,008    155,227   55,232    39,600
Percentage of all         84.9      89.1      89.3      87.5
  corporations
New corporations:
  Number or amount     -10,874    18,924     6,619     5,640
  Percentage of all       15.1      10.9      10.7      12.5
    corporations
SELECTED COUNTRY
  OF FOREIGN OWNER
Selected countries,     -69,726   172,354    61,224   44,674
  total
Percentage of all         97.0      99.0      99.0      98.7
  countries
Selected countries:
  Argentina                -141        42        12       12
  Australia             -3,606     4,586     1,623       382
  Austria                 -158       842       292       286
  Belgium                 -208     2,011       707       674
  Bermuda               -1,251     2,666       978       456
  Brazil                -1,670       440       155       149
  British Virgin        -1,352       760       263       256
    Islands [1]
  Canada               -10,840    11,395     4,340     3,721
  Cayman Islands        -5,568     3,888     1,361     1,186
  China                 -1,170       585       204       143
  China (Taiwan)          -153       763       267       210
  Cyprus                   -95        77        27        25
  Denmark                 -303     1,474       516       440
  Finland                  -33       554       198       181
  Former Soviet           -256     * 106      * 37      * 37
    Union [2]
  France [3]            -3,468    11,753     4,135     3,540
  Germany               -3,847    14,450     5,086     4,436
  Hong Kong               -373       137        47        46
  Hungary                  -60     * 542     * 190         d
  India                   -830       633       220       200
  Ireland                 -522     1,256       454       382
  Isles of Man,           -701     2,426       844       635
    Jersey, and
    Guernsey
  Israel [4]              -778     1,530       540       479
  Italy                 -1,009     2,387       845       747
  Japan                 -5,629    21,241     7,567     5,765
  Liechtenstein            -81       299       102       100
  Luxembourg            -1,282     1,163       425       384
  Mexico                -1,047     3,246     1,136       392
  Netherlands           -2,493    22,866     8,129     5,523
  New Zealand             -529        67        23        21
  Norway                -1,811       455       160       147
  Panama                  -154       168        64        50
  Portugal [5]          * -392      * 29       * 9         d
  Puerto Rico             -100        14         5         d
  Saudi Arabia         * -2,013     * 10       * 4         d
  Singapore               -383       337       118       114
  South Korea,          -1,610     2,146       775       722
    Republic of
  Spain                 -1,695     3,221     1,148     1,078
  Sweden                  -395     2,080       682       551
  Switzerland           -2,525    14,279     5,030     4,519
  United Kingdom        -9,170    34,346    12,130     6,175
  Venezuela                -25     1,084       376       326

* Estimate should be used with caution because of the small
number of sample returns on which it is based.

d-Not shown to avoid disclosure of information about specific
corporations. However, data are included in the appropriate
totals.

[1] Includes domestic corporations with owners from Tortola,
Anegada, Jost Van Dykes, and Virgin Gorda.

[2] Includes domestic corporations with owners from Russia,
Armenia, Uzbekistan, Ukraine, Turkmenistan, Tajikistan, Sakhalin
Island, Moldova, Kyrgyzstan, Azerbaijan, Kazakhstan, Kurile
Islands, Georgia, and Belarus.

[3] Includes domestic corporations with owners from Corsica.

[4] Includes domestic corporations with owners from the West
Bank.

[5] Includes domestic corporations with owners from the Azores.

NOTES: "New" corporations were those with dates of incorporation
between 2010 and 2013; "old" corporations were those with dates
of incorporation prior to 2010 or with unknown dates of
incorporation. Countries shown in this table were those in which
one or more of the following were present: (a) at least 1,000
returns, (b) at least $10 billion of total assets, or (c) at
least $5 billion of total receipts. Detail may not add to totals
because of rounding.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Figure B

Selected Items of Foreign-Controlled Domestic Corporations, Tax
Years 2011-2012 [Money amounts are in millions of dollars]

Selected item                        Tax year          Percentage
                                                         change
                                2011         2012         (3)
                                (1)          (2)

Number of returns, total        76,793       83,814          9.1
  With net income               33,358       34,736          4.1
  With total income tax         24,121       23,418         -2.9
    after credits
Total assets                 11,732,552   12,277,447         4.6
  Net worth                  2,435,171    2,808,971         15.4
Total receipts               4,586,774    4,721,115          2.9
  Business receipts          4,203,240    4,284,239          1.9
  Interest [1]                 161,850      143,242        -11.5
  Royalties                     19,677       20,787          5.6
  Dividends received from        4,210        5,682         35.0
    domestic corporations
  Dividends received from        7,457       15,368        106.1
    foreign corporations
Total deductions             4,511,644    4,563,917          1.2
  Cost of goods sold         3,099,807    3,147,347          1.5
  Compensation of officers      19,489       20,108          3.2
  Salaries and wages [2]       294,768      318,042          7.9
  Interest paid                134,886      126,534         -6.2
  Depreciation                 144,567      122,717        -15.1
Total receipts less             75,129      157,198        109.2
  total deductions
Constructive taxable             6,365       11,959         87.9
    income from related
    foreign corporations,
    total
  Includable income of           2,588        3,435         32.7
    controlled foreign
    corporations
  Foreign dividend               3,777        8,524        125.7
    income resulting
    from foreign taxes
    deemed paid
Net income (less deficit)       79,803      167,052        109.3
  Net income                   166,514      238,934         43.5
  Deficit                      -86,710      -71,882        -17.1
Statutory special               41,540       71,070         71.1
    deductions, total
  Net operating                 33,610       62,712         86.6
    loss deduction
Income subject to tax          130,503      174,151         33.4
Total income tax                46,252       61,851         33.7
    before credits
  Income tax                    45,500       60,707         33.4
  Alternative minimum tax          718        1,110         54.6
Total credits                   10,555       16,598         57.3
  Foreign tax credit             7,966       12,885         61.7
  General business               2,181        2,775         27.2
    credit
Total income tax                35,705       45,240         26.7
  after credits

[1] Excludes nontaxable interest received on State and local
government obligations.

[2] Excludes amounts included in cost of goods sold.

NOTE: Percentages are computed using rounded data.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Figure C

Foreign-Controlled Domestic Corporations: Selected Items, by
Industrial Sector, Tax Year 2012 [Money amounts are in millions
of dollars]

Industrial sector                    Returns

                            Number     Percentage
All industries                (1)     of total (2)

                            83,814          100.0
  Agriculture, forestry,       525            0.6
    fishing, and hunting
  Mining                       896            1.1
  Utilities                    207            0.2
  Construction               1,459            1.7
  Manufacturing              7,687            9.2
  Wholesale and             22,796           27.2
      retail trade
    Wholesale trade         19,260           23.0
    Retail trade             3,536            4.2
  Transportation and         1,810            2.2
    warehousing
  Information                3,721            4.4
  Finance and insurance      3,225            3.8
  Real estate and rental    20,315           24.2
    and leasing
  Professional,             10,913           13.0
    scientific, and
    technical services
  Management of companies    4,979            5.9
    (holding companies)
  Administrative and         1,319            1.6
    support and waste
    management and
    remediation services
  Educational services          93            0.1
  Health care and              316            0.4
    social assistance
  Arts, entertainment,       1,389            1.7
    and recreation
  Accommodation and          1,165            1.4
    food services
  Other services               998            1.2

Industrial sector                  Total assets

                              Amount      Percentage
All industries                 (3)       of total (4)

                            12,277,447         100.0
  Agriculture, forestry,       10,496            0.1
    fishing, and hunting
  Mining                      335,852            2.7
  Utilities                   146,758            1.2
  Construction                 52,298            0.4
  Manufacturing             2,815,087           22.9
  Wholesale and               820,345            6.7
      retail trade
    Wholesale trade           710,810            5.8
    Retail trade              109,535            0.9
  Transportation and           87,491            0.7
    warehousing
  Information                 219,477            1.8
  Finance and insurance     5,523,515           45.0
  Real estate and rental      198,585            1.6
    and leasing
  Professional,               235,423            1.9
    scientific, and
    technical services
  Management of companies   1,676,146           13.7
    (holding companies)
  Administrative and           58,756            0.5
    support and waste
    management and
    remediation services
  Educational services          5,134            [1]
  Health care and              23,645            0.2
    social assistance
  Arts, entertainment,         13,556            0.1
    and recreation
  Accommodation and            50,481            0.4
    food services
  Other services                4,403            [1]

Industrial sector                Total receipts

                             Amount      Percentage
All industries                 (5)      of total (6)

                            4,721,115         100.0
  Agriculture, forestry,      11,062            0.2
    fishing, and hunting
  Mining                     120,886            2.6
  Utilities                   52,282            1.1
  Construction                46,966            1.0
  Manufacturing             2,146,906          45.5
  Wholesale and             1,336,699          28.3
      retail trade
    Wholesale trade         1,160,458          24.6
    Retail trade             176,241            3.7
  Transportation and          71,340            1.5
    warehousing
  Information                109,759            2.3
  Finance and insurance      446,155            9.5
  Real estate and rental      30,226            0.6
    and leasing
  Professional,              148,738            3.2
    scientific, and
    technical services
  Management of companies     78,441            1.7
    (holding companies)
  Administrative and          54,451            1.2
    support and waste
    management and
    remediation services
  Educational services         2,429            0.1
  Health care and             15,040            0.3
    social assistance
  Arts, entertainment,         7,829            0.2
    and recreation
  Accommodation and           36,505            0.8
    food services
  Other services               5,401            0.1

[1] Less than 0.05 percent.

NOTES: Detail may not add to totals because of rounding.
Percentages are computed using rounded data.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Figure D

Total Receipts of All Corporations and Foreign-Controlled
Domestic Corporations, by Industrial Sector, Tax Year 2012
[Money amounts are in millions of dollars]

Industrial sector                    Total receipts

                                All            All
                            corporations   corporations
                                [2]         other than
                                           Forms 1120S
                                            and 1120-F
                                              [2, 3]

                                    (1)            (2)

All Industries [1]           29,403,675     22,655,743
  Agriculture, forestry,        207,788         89,435
    fishing, and hunting
  Mining                        505,457        446,486
  Utilities                     533,516        525,691
  Construction                1,211,895        413,118
  Manufacturing               8,513,136      7,679,456
  Wholesale and               8,305,550      5,508,400
      retail trade
    Wholesale trade           4,460,620      2,993,908
    Retail trade              3,844,930      2,514,492
  Transportation and            844,429        603,721
    warehousing
  Information                 1,147,158      1,063,369
  Finance and insurance       3,615,371      3,430,528
  Real estate and               372,901        264,350
    rental and leasing
  Professional,               1,195,356        693,388
    scientific, and
    technical services
  Management of companies       785,851        750,292
      (holding companies)
    Administrative and          533,668        301,747
      support and waste
      management and
      remediation
      services
  Educational services           68,230         39,574
  Health care and               723,849        424,798
    social assistance
  Arts, entertainment,          118,158         53,819
    and recreation
  Accommodation and             505,495        282,654
    food services
  Other services                215,855         84,905

Industrial sector                         Total receipts

                             Foreign-controlled domestic corporations

                             Amount         As a percentage of--

                                            All            All
                                        corporations   corporations
                                            [2]         other than
                                                       Forms 1120S
                                                        and 1120-F
                                                          [2, 3]

                               (3)          (4)        (5)

All Industries [1]          4,721,115          16.1           20.8
  Agriculture, forestry,      11,062            5.3           12.4
    fishing, and hunting
  Mining                     120,886           23.9           27.1
  Utilities                   52,282            9.8            9.9
  Construction                46,966            3.9           11.4
  Manufacturing             2,146,906          25.2           28.0
  Wholesale and             1,336,699          16.1           24.3
      retail trade
    Wholesale trade         1,160,458          26.0           38.8
    Retail trade             176,241            4.6            7.0
  Transportation and          71,340            8.4           11.8
    warehousing
  Information                109,759            9.6           10.3
  Finance and insurance      446,155           12.3           13.0
  Real estate and             30,226            8.1           11.4
    rental and leasing
  Professional,              148,738           12.4           21.5
    scientific, and
    technical services
  Management of companies     78,441           10.0           10.5
      (holding companies)
    Administrative and        54,451           10.2           18.0
      support and waste
      management and
      remediation
      services
  Educational services         2,429            3.6            6.1
  Health care and             15,040            2.1            3.5
    social assistance
  Arts, entertainment,         7,829            6.6           14.5
    and recreation
  Accommodation and           36,505            7.2           12.9
    food services
  Other services               5,401            2.5            6.4

[1] Includes small amounts for "Nature of business not
allocable," which is not shown separately.

[2] Includes returns of foreign-controlled domestic corporations
(FCDCs).

[3] Form 1120S is entitled U.S. Income Tax Return for an S
Corporation and Form 1120-F is entitled U.S. Income Tax Return of
a Foreign Corporation. Forms 1120S reported $6.6 trillion of
total receipts and Forms 1120-F reported $0.2 trillion of total
receipts.

NOTES: Detail may not add to totals because of rounding.
Percentages are computed using rounded data.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Figure E

Foreign-Controlled Domestic Corporations as a Percentage of All
Corporations: Selected Items for Selected Minor Industries, Tax
Year 2012

[Money amounts are in millions of dollars]

Minor industry [1]       Number of    Total    Net worth    Total
                          returns    assets                assets

                              (1)      (2)        (3)        (4)

Breweries                     402    96,050      22,480    22,907
    (manufacturing),
    total
  Foreign-controlled            8    79,455      12,776    17,366
    domestic
    corporations
    (FCDCs)
  FCDCs as a                  2.0      82.7        56.8      75.8
    percentage
    of the total
Audio and video             1,270    55,803      22,869    28,864
    equipment
    manufacturing
    and reproducing
    magnetic and
    optical media,
    total
  Foreign-controlled           75    46,212      17,819    18,533
    domestic
    corporations
  FCDCs as a                  5.9      82.8        77.9      64.2
    percentage of
    the total
Commodity contracts         2,372    63,778       5,628     4,242
    dealing and
    brokerage,
    total
  Foreign-controlled          104    50,578       3,966     2,710
    domestic
    corporations
  FCDCs as a                  4.4      79.3        70.5      63.9
    percentage of
    the total
Engine, turbine, and          268    84,853      32,482    64,641
    power transmission
    equipment
    (manufacturing),
    total
  Foreign-controlled           56    57,413      20,392    39,621
    domestic
    corporations
  FCDCs as a                 20.9      67.7        62.8      61.3
    percentage of
    the total
Sound recording             5,857    35,633      10,459     9,680
    industries, total
  Foreign-controlled           55    27,636       8,924     5,559
    domestic
    corporations
  FCDCs as a                  0.9      77.6        85.3      57.4
    percentage of
    the total
Rubber products             1,168    53,904      11,136    67,313
    (manufacturing),
    total
  Foreign-controlled          150    28,972       5,942    36,353
    domestic
    corporations
  FCDCs as a                 12.8      53.7        53.4      54.0
    percentage of
    the total
Motor vehicle and          20,243    187,935     37,862    275,001
    motor vehicle
    parts and supplies
    (wholesale
    trade), total
  Foreign-controlled        1,761    126,744     17,497    146,233
    domestic
    corporations
  FCDCs as a                  8.7      67.4        46.2      53.2
    percentage of
    the total
Electrical and             31,885    215,587     72,488    408,146
    electronic goods
    (wholesale trade),
    total
  Foreign-controlled        2,136    117,640     30,668    216,691
    domestic
    corporations
  FCDCs as a                  6.7      54.6        42.3      53.1
    percentage of
    the total
Cement, concrete,           3,878    108,428     52,045    61,550
    lime and gypsum
    products
    (manufacturing),
    total
  Foreign-controlled           82    81,997      40,948    31,352
    domestic
    corporations
  FCDCs as a                  2.1      75.6        78.7      50.9
    percentage of
    the total
Motor vehicles              6,352    870,633    265,140    714,473
    and parts
    (manufacturing),
    total
  Foreign-controlled          550    409,623    132,648    361,551
    domestic
    corporations
  FCDCs as a                  8.7      47.0        50.0      50.6
    percentage of
    the total
Metal ore mining            1,249    197,120    110,582    63,255
  Foreign-controlled          257    107,264     53,220    31,815
    domestic
    corporations
  FCDCs as a                 20.6      54.4        48.1      50.3
    percentage of
    the total

Minor industry [1]       Net income   Net income   Income      Total
                           (less                   subject    income
                          deficit)                 to tax    tax after
                                                              credits

                            (5)          (6)         (7)        (8)

Breweries                    1,870        1,897    * 1,540      * 526
    (manufacturing),
    total
  Foreign-controlled         1,291      * 1,300    * 1,300      * 455
    domestic
    corporations
    (FCDCs)
  FCDCs as a                  69.0       * 68.5    * 84.4      * 86.5
    percentage
    of the total
Audio and video                708        1,263       605         134
    equipment
    manufacturing
    and reproducing
    magnetic and
    optical media,
    total
  Foreign-controlled           285          415        75          26
    domestic
    corporations
  FCDCs as a                  40.3         32.9      12.4        19.4
    percentage of
    the total
Commodity contracts            208          573       355         124
    dealing and
    brokerage,
    total
  Foreign-controlled           215          291       287         100
    domestic
    corporations
  FCDCs as a                 103.4         50.8      80.8        80.6
    percentage of
    the total
Engine, turbine, and         3,911        4,396     4,025         875
    power transmission
    equipment
    (manufacturing),
    total
  Foreign-controlled         2,111        2,296     2,212         774
    domestic
    corporations
  FCDCs as a                  54.0         52.2      55.0        88.5
    percentage of
    the total
Sound recording                -23          382       *72          21
    industries, total
  Foreign-controlled           -86           98        *7           2
    domestic
    corporations
  FCDCs as a                   N/C         25.7      *9.7         9.5
    percentage of
    the total
Rubber products              3,148        3,237     1,904         694
    (manufacturing),
    total
  Foreign-controlled         1,803        1,826     1,067         485
    domestic
    corporations
  FCDCs as a                  57.3         56.4      56.0        69.9
    percentage of
    the total
Motor vehicle and            7,727        8,413     3,658       1,218
    motor vehicle
    parts and supplies
    (wholesale
    trade), total
  Foreign-controlled         4,010        4,336     1,819         637
    domestic
    corporations
  FCDCs as a                  51.9         51.5      49.7        52.3
    percentage of
    the total
Electrical and              10,076       12,209     6,218       1,585
    electronic goods
    (wholesale trade),
    total
  Foreign-controlled         4,520        5,031     3,565       1,269
    domestic
    corporations
  FCDCs as a                  44.9         41.2      57.3        80.1
    percentage of
    the total
Cement, concrete,             -705        1,797       483         158
    lime and gypsum
    products
    (manufacturing),
    total
  Foreign-controlled        -1,278          510       219          85
    domestic
    corporations
  FCDCs as a                   N/C         28.4      45.3        53.8
    percentage of
    the total
Motor vehicles              25,583       30,120    10,152       2,194
    and parts
    (manufacturing),
    total
  Foreign-controlled         5,224        6,920     5,157       1,467
    domestic
    corporations
  FCDCs as a                  20.4         23.0      50.8        66.9
    percentage of
    the total
Metal ore mining            10,507       11,637    11,403       1,329
  Foreign-controlled         7,668        8,392     8,313         824
    domestic
    corporations
  FCDCs as a                  73.0         72.1      72.9        62.0
    percentage of
    the total

* Estimate should be used with caution because of the small
number of sample returns on which it is based.

N/C-Not calculated.

[1] This figure includes minor industries in which foreign-
controlled domestic corporations accounted for at least 50
percent of the total receipts (Column 4). The minor industries
are listed by decreasing percentage of FCDC total receipts to
total receipts of all corporations.

NOTE: Percentages are computed using rounded data.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Figure F

Foreign-Controlled Domestic Corporations: Distribution of Total
Receipts by Country of Foreign Owner, Tax Years 2003 and 2012

Country of             Percentage of total receipts
  foreign owner

                        2012      2013

France                   6.0      6.0
Netherlands              7.7     10.6
Switzerland              7.9      4.9
Canada                   8.4      7.5
Germany                  9.2     13.8
Japan                   15.3     19.6
United Kingdom          19.8     15.1
Other                   25.7     22.5

NOTE: In current dollars, the total amount of
receipts was $2,6 trillion for 2003 and $4.7 trillion
for 2012.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Note: Table made from bar graph.

Figure G

Foreign-Controlled Domestic Corporations: Selected Items for
Top Seven Countries, by Selected Industries, Tax Year 2012

[Money amounts are in millions of dollars]

Country and industry        Total      Total       Total        Net
                           assets     receipts   deductions    income
                                                               (less
                                                              deficit)

                             (1)        (2)         (3)         (4)

United Kingdom, total     2,685,077   934,093      903,113     33,710
  Manufacturing            874,639    644,184      628,712     16,390
    Petroleum and          671,247    523,227      517,168      6,796
      coal products
      manufacturing
Japan, total              1,277,044   720,834      699,121     22,472
  Manufacturing            309,282    350,657      342,325      8,582
    Transportation         190,734    229,292      225,840      3,504
      equipment
      manufacturing
  Wholesale trade          182,499    281,407      273,681      8,299
    Wholesale trade,       135,109    223,758      218,821      5,484
      durable goods
Germany, total            1,276,169   432,871      414,496     19,149
  Manufacturing            340,801    191,781      186,207      5,904
    Machinery               77,912     53,858       51,573      2,496
      manufacturing
    Transportation         176,703     69,611       68,868        750
      equipment
      manufacturing
  Wholesale trade          101,505    101,591       98,013      3,583
    Wholesale trade,        91,104     85,152       81,871      3,284
      durable goods
  Finance and              709,786     51,977       46,298      5,936
    insurance
Canada, total             1,392,332   397,374      391,311      6,011
  Manufacturing            104,575    121,590      117,439      4,215
  Wholesale trade           71,627     71,062       69,755      1,329
    Wholesale trade,        58,755     46,091       45,424        689
      nondurable goods
  Finance and insurance    621,493     73,382       72,148      1,041
    Insurance carriers     513,876     69,396       69,183         23
      and related
      activities
Switzerland, total        1,403,707   370,664      346,960     24,225
  Manufacturing            190,528    119,995      109,450     10,671
    Chemical                85,430     55,433       47,192      8,253
      manufacturing
  Wholesale trade           32,172    145,454      144,482        968
    Wholesale trade,        20,605    126,728      126,293        435
      nondurable goods
  Finance and insurance   1,121,898    64,542       53,286     11,578
Netherlands, total        1,187,148   364,287      342,348     25,107
  Manufacturing            268,347    138,940      130,943     10,982
    Chemical                95,728     70,882       66,774      5,134
      manufacturing
  Retail trade              19,765     37,467       37,021        447
  Finance and insurance    603,344     71,825       68,076      3,736
    Insurance carriers     484,080     67,493       65,551      1,928
      and related
      activities
France, total             1,114,917   284,392      271,982     12,710
  Manufacturing            213,404    133,614      128,245      5,509
    Petroleum and coal      17,994     33,853       33,803         52
      products
      manufacturing
  Wholesale trade           34,080     43,487       42,619        892
    Wholesale trade,        14,506     29,142       28,772        386
      durable goods
  Finance and insurance    652,223     34,807       31,960      2,871

Country and industry       Net     Income      Total income tax
                          income   subject       after credits
                                   to tax
                                             Amount      As a
                                                      percentage
                                                       of total
                                                       receipts

                           (5)       (6)      (7)           (8)

United Kingdom, total     42,880   34,346    6,175          0.7
  Manufacturing           21,300   18,185    2,270          0.4
    Petroleum and         11,036   11,035       71          [1]
      coal products
      manufacturing
Japan, total              28,101   21,241    5,765          0.8
  Manufacturing           10,723    7,923    2,504          0.7
    Transportation        4,374     3,644    1,038          0.5
      equipment
      manufacturing
  Wholesale trade         9,478     7,609    1,703          0.6
    Wholesale trade,      6,297     4,698    1,040          0.5
      durable goods
Germany, total            22,996   14,450    4,436          1.0
  Manufacturing           8,278     7,127    2,105          1.1
    Machinery             3,294     3,171      911          1.7
      manufacturing
    Transportation          948       263       85          0.1
      equipment
      manufacturing
  Wholesale trade         3,996     1,552      527          0.5
    Wholesale trade,      3,438     1,150      389          0.5
      durable goods
  Finance and             5,984     2,734      821          1.6
    insurance
Canada, total             16,851   11,395    3,721          0.9
  Manufacturing           5,635     3,786    1,217          1.0
  Wholesale trade         1,940     1,189      382          0.5
    Wholesale trade,      1,137       588      193          0.4
      nondurable goods
  Finance and insurance   2,507     1,117    to to          0.8
    Insurance carriers    1,348       670      397          0.6
      and related
      activities
Switzerland, total        26,750   14,279    4,519          1.2
  Manufacturing           11,486   10,402    3,413          2.8
    Chemical              8,276     7,979    2,604          4.7
      manufacturing
  Wholesale trade         1,237       976      326          0.2
    Wholesale trade,        585       481      161          0.1
      nondurable goods
  Finance and insurance   12,232    1,576      417          0.6
Netherlands, total        27,599   22,866    5,523          1.5
  Manufacturing           11,677   11,196    1,747          1.3
    Chemical              5,461     5,380      824          1.2
      manufacturing
  Retail trade              483       411       52          0.1
  Finance and insurance   3,787       969      307          0.4
    Insurance carriers    1,928       430      153          0.2
      and related
      activities
France, total             16,178   11,753    3,540          1.2
  Manufacturing           6,298     4,828    1,380          1.0
    Petroleum and coal       52         1        1          [1]
      products
      manufacturing
  Wholesale trade         1,437     1,282      418          1.0
    Wholesale trade,        496       426      131          0.4
      durable goods
  Finance and insurance   3,124     1,129      353          1.0

[1] Less than 0.05 percent.

NOTES: This figure includes the seven countries with the largest
amounts of total receipts. For each of these countries, this
table also includes industries that accounted for at least 10
percent of the total receipts of the country. Percentages are
computed using rounded data.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.

Figure H

Foreign-Controlled Domestic Corporations: Distribution of
Selected Items by Age of Corporations, Tax Year 2012

                                        Old          New
                                   corporations   corporations

Number of returns                      71.7          28.3
Total assets                           90.8           9.2
Total receipts                         94.2           5.8
Net income less deficit                91.6           8.4
Net income                             89.5          10.5
Income subject to tax                  89.1          10.9
Total income tax after credits         87.5          12.5

NOTE: "New" corporations were those with dates of incorporation
between 2010 and 2013; "old" corporations were those with
dates of incorporation prior to 2010 or with unknown
dates of incorporation.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015

Note: Table made from bar graph.

Figure I

Foreign-Controlled Domestic Corporations: Coefficients of
Variation for Selected Items, by Selected Industrial Sectors
and Selected Countries of Foreign Owners, Tax Year 2012

Selected industrial     Coefficients of variation (percentages)
sector or country

                      Number of   Total     Total      Net
                       returns    assets   receipts   income

                           (1)     (2)       (3)       (4)

Total                     2.58     0.01       0.10     0.10
Selected industrial      29.61     0.61       1.33     2.32
  sectors:
  Construction
Finance and              10.64     0.01       0.12     0.14
  insurance
Information              18.25     0.20       1.51     0.86
Management of            12.85     0.04       0.22     0.33
  companies
  (holding
  companies)
Manufacturing             8.86     0.03       0.08     0.11
Professional,             9.63     0.26       0.83     1.04
  scientific, and
  technical
  services
Real estate and           4.83     0.39       1.32     2.37
  rental and
  leasing
Retail trade             19.09     0.33       0.60     0.61
Wholesale trade           4.41     0.13       0.25     0.47
Selected countries       20.26     0.16       0.33     0.43
  of foreign
  owners: Bermuda
Canada                    6.48     0.06       0.60     0.49
France                   16.06     0.04       0.51     0.31
Germany                  10.88     0.06       0.35     0.50
Japan                     8.80     0.07       0.22     0.28
Netherlands              18.28     0.04       0.25     0.18
South Korea,             19.80     0.51       0.81     1.51
  Republic of
Sweden                   22.84     0.36       0.82     0.95
Switzerland               9.64     0.04       0.29     0.19
United Kingdom           10.42     0.02       0.14     0.18
Venezuela                31.11     1.08       0.98     1.76

Selected industrial        Coefficients of variation
sector or country                 (percentages)

                      Deficit   Income    Total income
                                subject    tax after
                                to tax      credits

                        (5)       (6)         (7)

Total                   0.36      0.12           0.15
Selected industrial     2.25      2.52           3.24
  sectors:
  Construction
Finance and             1.21      0.25           0.25
  insurance
Information             2.58      0.89           0.81
Management of           1.27      0.33           0.40
  companies
  (holding
  companies)
Manufacturing           0.43      0.13           0.17
Professional,           3.47      1.15           1.34
  scientific, and
  technical
  services
Real estate and         2.46      3.57           3.78
  rental and
  leasing
Retail trade            4.23      0.47           0.47
Wholesale trade         1.91      0.50           0.58
Selected countries      3.31      0.70           1.37
  of foreign
  owners: Bermuda
Canada                  0.89      0.66           0.67
France                  1.64      0.39           0.42
Germany                 1.84      0.60           0.65
Japan                   1.25      0.34           0.40
Netherlands             1.83      0.20           0.27
South Korea,            3.10      1.60           1.60
  Republic of
Sweden                  7.51      0.84           1.08
Switzerland             1.78      0.27           0.28
United Kingdom          0.98      0.18           0.32
Venezuela               9.19      1.49           1.59

NOTE: For a general discussion on coefficients of variation, see
the Sampling Methodology and Data Limitations section of this
issue of the Statistics of Income Bulletin.

SOURCE: IRS, Statistics of Income Division, Foreign-Controlled
Domestic Corporations, August 2015.
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Author:Hobbs, James R.
Publication:Statistics of Income. SOI Bulletin
Date:Jun 22, 2015
Words:27152
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