U.S. Tax Filing Requirements for Common International Investments

If you are a U.S. citizen or resident with international investments or foreign financial accounts, you may have complex U.S. tax filing and reporting obligations—even if your accounts are tax-advantaged in your country of residence. Below are some of the most common country-specific accounts and the key U.S. tax considerations for each.

Canada: RESP and TFSA

Registered Education Savings Plans (RESPs) and Tax-Free Savings Accounts (TFSAs) are popular Canadian savings vehicles, but the U.S. does not recognize them as tax-advantaged.

  • Taxation: All income (interest, dividends, capital gains) earned in these accounts is taxable annually in the U.S., even if not distributed.

  • FBAR (FinCEN 114): Must be reported if the aggregate value of all foreign accounts exceeds $10,000 at any time during the year.

  • FATCA (Form 8938): Must be reported if the value of specified foreign assets exceeds IRS thresholds.

  • Foreign Trust Reporting (Forms 3520/3520-A): RESPs and TFSAs are generally treated as foreign trusts, requiring annual reporting with significant penalties for noncompliance.

Australia: Superannuation Funds

Australian superannuation funds (including self-managed super funds) are typically treated as foreign grantor trusts for U.S. tax purposes.

  • Taxation: U.S. persons may need to report income and gains from these funds on their U.S. tax return, even if not distributed.

  • FBAR: Required if the total value of foreign accounts exceeds $10,000.

  • FATCA (Form 8938): Required if asset thresholds are met.

  • Foreign Trust Reporting (Forms 3520/3520-A): May be required for superannuation funds, depending on the type and structure.

  • PFIC Reporting (Form 8621): May be required if the fund holds non-U.S. mutual funds or similar investments.

United Kingdom: ISA (Individual Savings Account)

UK ISAs are tax-free in the UK, but not in the U.S.

  • Taxation: All interest, dividends, and capital gains in a UK ISA are taxable in the U.S. annually.

  • FBAR: Required if the total value of foreign accounts exceeds $10,000.

  • FATCA (Form 8938): Required if asset thresholds are met.

  • PFIC Reporting (Form 8621): Required if the ISA holds non-U.S. mutual funds or similar investments.

  • No Treaty Relief: The U.S.-UK tax treaty does not exempt ISAs from U.S. tax or reporting.

Singapore: Deemed RSU Vesting and Investment Accounts

  • RSUs Deemed Vested Upon Departure: If you hold Singapore RSUs that are deemed vested when you leave Singapore, the fair market value at vesting is treated as ordinary income and must be reported on your U.S. tax return for that year. This value becomes your cost basis for future capital gains tax purposes. If the shares are held in a foreign account, additional reporting may be required.

  • Investment Accounts: U.S. persons must file an FBAR if the total value of Singapore accounts exceeds $10,000 at any time during the year, and may need to file Form 8938 if the value of specified foreign assets exceeds IRS thresholds. All income from these accounts must be reported on your U.S. tax return.

Japan: NISA, Pension Accounts, and Equity Compensation

  • NISA and Japanese Brokerage Accounts: All interest, dividends, and capital gains are taxable in the U.S., even if tax-advantaged in Japan. These accounts are reportable on FBAR and Form 8938 if thresholds are met. Some pension accounts may require additional reporting (e.g., Forms 3520/3520-A).

  • Japanese Pension Accounts: Distributions are generally taxable in the U.S. as ordinary income. Pension accounts are typically reportable on FBAR and Form 8938 if thresholds are met.

  • Equity Compensation (RSUs, Stock Options): RSUs are taxed as ordinary income when vested; stock options may be taxed at exercise or sale. If held in a Japanese account, the account may be reportable on FBAR and Form 8938.

China: Mutual Funds, Pension Accounts, Insurance, and Equity Compensation

  • Chinese Mutual Funds: Most are classified as PFICs for U.S. tax purposes, requiring annual Form 8621 filings. These, along with other investment accounts, are reportable on FBAR and Form 8938 if thresholds are met.

  • Pension Accounts: Generally reportable on FBAR and Form 8938. Contributions, earnings, and distributions may be taxable in the U.S.

  • Insurance Products: Foreign insurance or annuity policies with cash value must be reported on FBAR and Form 8938. Increases in cash value and distributions may be taxable.

  • Equity Compensation: Income from RSUs and stock options must be reported as ordinary income when vested or exercised. If held in a Chinese account, the account may be reportable on FBAR and Form 8938.

South Africa: Retirement Annuities, TFSAs, Unit Trusts, and Equity Compensation

  • Retirement Annuities: Distributions are generally taxable in the U.S. as ordinary income. The U.S.-South Africa tax treaty may limit U.S. tax on certain pension distributions. Accounts may be reportable on FBAR and Form 8938.

  • Tax-Free Savings Accounts (TFSAs): U.S. tax law does not recognize the South African tax-free status. All income is taxable in the U.S. and accounts are reportable on FBAR and Form 8938.

  • Unit Trusts: May be subject to PFIC rules, requiring Form 8621. Also reportable on FBAR and Form 8938.

  • Equity Compensation: Income from South African stock options or RSUs must be reported as ordinary income. If held in a South African account, the account may be reportable on FBAR and Form 8938.

General U.S. Reporting for Foreign Accounts and Investments

  • FBAR (FinCEN Form 114): Required if the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the year.

  • FATCA (Form 8938): Required if the value of specified foreign financial assets exceeds IRS thresholds.

  • PFIC Reporting (Form 8621): Required for U.S. persons holding non-U.S. mutual funds or similar investments.

  • Foreign Trust Reporting (Forms 3520/3520-A): Required for many foreign retirement and savings accounts.

Key Takeaways:

  • U.S. persons must report and pay U.S. tax on income from most foreign accounts, even if tax-free or tax-deferred abroad.

  • Failure to comply with U.S. reporting requirements can result in significant penalties.

  • Each account type and country may have unique rules—consult a U.S. tax advisor with international experience for tailored guidance.

If you have international investments or foreign accounts, our team can help you navigate your U.S. tax filing and reporting obligations. Contact to schedule a call with a cross-border tax specialist.