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Schedule P (Form 1120-FSC) (Rev. 9-2017) Page 2
General Instructions Specific Instructions b. Aggregate on tabular schedule. The
FSC may choose to aggregate its
Purpose of Schedule Item A—Product or Product Line. transactions on a tabular schedule rather
Enter the product or product line that than on Schedule P. To do so, file one
Use Schedule P to figure an allowable meets one of the two standards below. Schedule P, entering only the taxpayer’s
transfer price to charge the FSC or an 1. The principal product based on the name and employer identification
allowable commission to pay to the FSC North American Industry Classification number (EIN) at the top of Schedule P.
under the administrative pricing rules System (NAICS) (see the last page of the Also, check box 1b. Attach a tabular
discussed below. The transfer price or Instructions for Form 1120-FSC). schedule to the partially completed
commission is used to allocate foreign Schedule P, reporting all information as if
trading gross receipts from the sale of 2. A recognized industry or trade use. a separate Schedule P were filed for
export property or from certain services Note: If the FSC used the Standard each aggregate of transactions
between the FSC and its related Industrial Classification (SIC) codes for described in 1a above. Also see Format
supplier. Schedule P in prior tax years, it may of tabular schedules on page 3.
Related supplier. Under Regulations complete item A based on the SIC codes Note: To be eligible for either of the
section 1.482-1(a), a related supplier is for the current tax year. aggregate reporting formats described
an entity that is owned or controlled Item B—Basis of Reporting. The FSC above in 1a or 1b, the FSC and its
directly or indirectly by the same must indicate the basis on which the related supplier must maintain a
interests as the FSC. amounts on Schedule P were supporting schedule that contains all
determined using either the transaction- information that would be reported if a
Filing the Schedule by-transaction basis or an election to separate Schedule P were filed for each
File the schedule for an FSC that has group transactions. transaction. The supporting schedule
should not be filed with the Schedule P.
foreign trading gross receipts during the Except for certain small FSCs electing
tax year from: to group transactions (discussed below), c. Tabular schedule of transactions.
• The resale of export property or from FSCs should not file a separate Instead of aggregate reporting, the FSC
certain services, or Schedule P for each transaction or each may choose to report transactions on a
• The disposition of export property or group of transactions. tabular schedule. File one Schedule P,
entering only the taxpayer’s name and
from services in which the FSC served 1. Transaction-by-transaction. If the EIN at the top of Schedule P. Also,
as commission agent for a related FSC makes pricing determinations check box 1c. Attach a tabular schedule
supplier. based on each transaction rather than an to the partially completed Schedule P,
election to group transactions, check reporting all information as if a separate
When Not To File box 1a, box 1b, or box 1c depending on Schedule P were filed for each
Do not complete Schedule P (or an the FSC’s preferred reporting format. transaction. Also see Format of tabular
alternate format) in the following three a. Aggregate on Schedule P. If the schedules on page 3.
situations. FSC chooses to aggregate its 2. Group of transactions. The FSC’s
1. The section 482 method of transfer transactions on one or more Schedules related supplier may elect to group
pricing is used. If the 23% and 1.83% P, check box 1a. transactions by product or product line
methods (see the instructions for • Aggregate on one Schedule P those in making pricing determinations. The
Sections B and C on page 3) do not transactions for which the same grouping of transactions applies to all
apply to a sale or if the related supplier administrative pricing method is applied, transactions completed during the tax
does not choose to use them, the provided all the transactions are year for that product or product line. Do
transfer price for a sale by the related included in the same product or product not group sale and lease transactions.
supplier to the FSC is figured on the line indicated in item A. To make the election, complete one
basis of the sales price actually charged • Aggregate on separate Schedules P Schedule P, entering only the taxpayer’s
but is subject to section 482 and its those transactions for which the same name and EIN at the top of Schedule P.
regulations and to Temporary pricing method is applied in each Also, check box 2 of item B and attach a
Regulations section 1.925(a)-1T(a)(3)(ii). separate product line. tabular schedule to the partially
2. The arm’s-length pricing method is If a different pricing method is applied completed Schedule P, reporting all
used. If the transaction is with an to some of the transactions in one or information as if a separate Schedule P
unrelated supplier, the FSC bases its more of the separate product lines, were filed for each group of transactions
profit on the arm’s-length price. additional Schedules P must be filed. (see Format of tabular schedules on
page 3).
3. Transactions are incomplete at the Example. If the 23% of combined
end of the year. If export property taxable income method applies to Note: If a grouping basis is elected,
bought by the FSC from the related transactions in three separate product aggregate reporting is not permitted.
supplier during the tax year is unsold by lines (as indicated in item A), the FSC Attach Schedule P to Form 1120-FSC.
the end of the FSC’s tax year or the would file three aggregate Schedules P. Once the election is made, grouping
related supplier’s tax year in which the However, if the FSC uses the 1.83% of redeterminations are permitted no later
property was transferred, the 23% and foreign trading gross receipts method for than 1 year after the due date of the
1.83% methods cannot be used. some of the transactions in one of the FSC’s timely filed (including extensions)
Instead, the transfer price of the property product lines, the FSC would file four Form 1120-FSC. For details, see
bought by the FSC is the supplier’s cost aggregate Schedules P. Regulations section 1.925(a)-1(c)(8).
of goods sold for the property. See
Temporary Regulations section Small FSC. If the FSC elected to be a
1.925(a)-1T(c)(5)(i)(C) for rules regarding small FSC under section 922(b) and has
the transfer price of property resold foreign trading gross receipts of $5
during the subsequent tax year. million or less for the tax year, the small
FSC may file a separate Schedule P for
each group of transactions instead of
filing a tabular schedule.
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