1. Sales should be included in Item 5 as wholesale codes (same under
new proposed rules)
Sales should be excluded from Item 5 (under new proposed rules these
sales would be reported in Item 5 as manufacturing codes)
3. Sales should be included in Item 5 as
wholesale codes (same under new proposed rules)
Tuesday, February 08, 2011 3:43 PM
Verne, B. Michael
Subject: Item 5 -U.S. or Foreign Revenue
Please confirm proposed treatment ofrevenue described below for Item 5 of the H5R Form, or advise as to how weshould treat same.
1. Company is a U.S. person and arranges for the manufacture of products in China by independent suppliers. Companyenters into sales contracts in the United States with U.S. wholesale customers. Company takes delivery of the products in China from the suppliers, and title and risk of loss passes in China to the U.S. customers, who arrange for shipment of the products from China. Company does not control wherethe products are shipped, but believes that most or all of the products areshipped to the United States for resale at U.S. retail stores operated by thecustomers. We presume based on guidance in paragraph five at the link copiedbelow (include revenue from sales by a U.S. entity regardless of the locationof customers), that revenue from the sales described above should be includedin Item 5, but please confirm same.