Form 1120-F: the return for a foreign corporation

A company formed outside the US that does business in the US has its own US return. Many foreign companies selling into the US never file it, and some who should file a protective return lose deductions by waiting. This guide explains who files, when, and how.

By Hamza Fida, Chartered Accountant. Reviewed by Mirza Fahad Baig, Chartered Accountant. Checked against official sources on . 3 minute read.

Short answer

Form 1120-F is the US income tax return for a foreign corporation. It is filed if the corporation had income effectively connected with a US business, US-source income not fully withheld on, or claims a refund. It is due April 15 with a US office, or June 15 without one, for calendar years. Business profit is taxed at 21%, plus any branch profits tax.

At a glance

Filed by
Foreign corporations with US business or income
Due, calendar year with US office
April 15
Due, without US office
June 15
Tax on business profit
21%
Branch profits tax
30%, often reduced by treaty
Protective return
Preserves deductions if you are unsure
Form 1120-F: the return for a foreign corporationSteps: 1. Decide whether there is a US business; 2. Allocate income and expenses; 3. Compute the tax and any branch profits tax; 4. Disclose treaty positions; 5. Attach Forms 5472.THE PROCESS AT A GLANCEForm 1120-F: the return for a foreign corporation1Decide whetherthere is a USbusinessAnd, under any treaty,a US permanentestablishment2Allocate incomeand expensesBetween US and non-USactivity, under theallocation rules3Compute the taxand any branchprofits taxOn the relevantschedules4Disclose treatypositionsOn Form 8833 whererequired5Attach Forms 5472For reportabletransactions withrelated partiesChecked against official sourcesTax BakersForm 1120-F: the return for a foreign corporationSteps: 1. Decide whether there is a US business; 2. Allocate income and expenses; 3. Compute the tax and any branch profits tax; 4. Disclose treaty positions; 5. Attach Forms 5472.THE PROCESS AT A GLANCEForm 1120-F: the return for aforeign corporation1Decide whether there is a USbusinessAnd, under any treaty, a US permanentestablishment2Allocate income and expensesBetween US and non-US activity, under theallocation rules3Compute the tax and any branchprofits taxOn the relevant schedules4Disclose treaty positionsOn Form 8833 where required5Attach Forms 5472For reportable transactions with relatedpartiesChecked against official sourcesTax Bakers
The process at a glance: 1. Decide whether there is a US business; 2. Allocate income and expenses; 3. Compute the tax and any branch profits tax; 4. Disclose treaty positions; 5. Attach Forms 5472.

Who must file Form 1120-F?

  • A foreign corporation engaged in a US trade or business at any time in the year, whether or not it had income or a profit.
  • A foreign corporation with US-source income on which the full US tax was not withheld at source.
  • A foreign corporation claiming a refund of US tax withheld, or a treaty benefit.

A US LLC owned by a foreign company is a US entity and does not file Form 1120-F; if disregarded, it files Form 5472 with a pro forma Form 1120. See Form 5472.

Which taxes does it report?

Income or taxTreatment
Income effectively connected with a US businessTaxed at 21% on net profit, after deductions
Branch profits tax30% of profits deemed repatriated from the US branch, often reduced or removed by treaty
US-source fixed or periodic income not connected with a US business30% of gross, or a treaty rate, usually collected by withholding

See effectively connected income and the 30% withholding.

When is it due?

By the 15th day of the 4th month after the year ends, April 15 for a calendar year, if the corporation has an office or place of business in the US. Otherwise by the 15th day of the 6th month, June 15. Form 7004 extends the filing date by six months, but not the time to pay.

Tax due is paid by the original due date even if the return is extended, and a foreign corporation expecting to owe tax pays quarterly estimates during the year, as a US corporation does.

What is a protective return?

A foreign corporation can claim deductions against effectively connected income only if it files a true and accurate return on time; filing very late can mean being taxed on gross income. A corporation unsure whether it has a US business can file a protective Form 1120-F showing no income, preserving its right to deductions if the IRS later decides it did. The regulations allow some leeway after the due date, but filing on time is safest.

How is it prepared?

  1. Decide whether there is a US business

    And, under any treaty, a US permanent establishment.

  2. Allocate income and expenses

    Between US and non-US activity, under the allocation rules.

  3. Compute the tax and any branch profits tax

    On the relevant schedules.

  4. Disclose treaty positions

    On Form 8833 where required.

  5. Attach Forms 5472

    For reportable transactions with related parties.

Form 5472 for each related party with reportable transactions; Form 8833 for treaty positions; and, where the foreign corporation is also a withholding agent paying US-source income to others, Forms 1042 and 1042-S. A foreign corporation with a US branch should also check state filing obligations where the branch operates. See Forms 1042 and 1042-S.

How do treaties help?

A corporation resident in a treaty country is generally taxed on business profits only if it has a US permanent establishment. Treaties also often reduce the branch profits tax. The treaty position is disclosed on Form 8833, and the return is still filed. See tax treaties.

Foreign company with US activity?

We work out whether your company has effectively connected income, prepare Form 1120-F with any treaty claims, and file protective returns where needed.

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Questions people ask

Who must file Form 1120-F?

Foreign corporations engaged in a US trade or business, with US-source income not fully withheld on, or claiming a refund or treaty benefit.

When is Form 1120-F due?

April 15 for a calendar-year corporation with a US office, or June 15 if it has none.

What is a protective Form 1120-F?

A return filed by a foreign corporation unsure whether it has a US business, to preserve its right to deductions if the IRS later finds it does.

Does a US LLC owned by a foreign company file Form 1120-F?

No. A US LLC is a US entity. If disregarded, it files Form 5472 with a pro forma Form 1120.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IRS: About Form 1120-F
  2. IRS: Instructions for Form 1120-F
  3. Treasury Regulations section 1.882-4: allowance of deductions and credits to foreign corporations

Rules and fees change. If you are reading this long after October 1, 2026, confirm the figures with the source before you rely on them.

Foreign-owned and non-resident companiesEffectively connected income explained for foreign ownersForeign-owned and non-resident companiesTax treaties and your US LLC: how they change what you oweFederal tax formsForm 5472: who files, what to report and the deadline

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This guide is general information. It is not tax or legal advice for your situation.