Xpat

PFIC check for U.S. investors

Is a European stock a passive foreign investment company? Search 37 non-U.S. companies and funds. Each page shows the evidence behind the answer: the company's own statement, Xpat's estimate from its financial statements, and the sources.

12 companies state they are not a PFIC in their SEC annual report; 19 more are estimated from their financial statements. Evidence gathered 2026-11-15. U.S. companies are never PFICs.

Questions

What is a PFIC?

A passive foreign investment company is a non-U.S. corporation with at least 75% passive income, or at least 50% of its assets producing passive income, in a tax year. Passive income means interest, dividends, rents and gains on investments. A U.S. citizen or green-card holder who owns one files Form 8621 every year and, without an election, pays tax at the top rate plus an interest charge on gains and large distributions.

Are European ETFs and funds PFICs?

Yes. Every fund or ETF set up outside the U.S. is a PFIC, including the UCITS ETFs from Ireland and Luxembourg that European brokers sell, and funds held inside a PEA, an ISA or an assurance-vie. A few providers publish the annual statement needed for a QEF election; most do not.

Are individual European stocks PFICs?

Rarely. An operating business, one that makes and sells things, earns active income and holds mostly active assets, so it passes both tests by a wide margin. The risk sits with investment companies, holding companies, property companies, cash-rich companies with little revenue (such as early-stage biotechs) and, without their special exceptions, banks and insurers.

How does Xpat check a company?

In order: the company type (a fund is always a PFIC); the PFIC statement in the company's latest SEC annual report, when it files one; and an estimate of its passive assets and passive income from the figures it tags in its own financial statements (SEC XBRL or EU ESEF filings). The result is a screen, not a certification: the test is run by the company each year on figures only it has.

Checked 2026-11-15Xpat's reading · Xpat's reading of PFIC screen for individual stocks: Xpat screens by type of company: operating businesses pass, funds, investment trusts and cash-rich holding companies are excluded. The test is annual and only the company can confirm it, so a stock is PFIC-screened, not certified. Banks and insurers pass only through the active banking or insurance exception, so they are shown as screened with that caveat. Where a company has published a statement, the stock records its year and source. · Xpat's reading of PFIC check from company statements and financial statements: Passive assets are estimated as cash plus financial investments (Xpat counts all cash as passive, the long-standing IRS position). Total assets are taken at market value (market capitalisation at the balance-sheet date plus liabilities), the basis a publicly traded company may use, when the share count and price are known; otherwise at book value, which errs high. A company statement is read from its own clause, and a present-tense statement in the annual report for a year counts for that year. Passive income is estimated as finance income over revenue plus finance income. At or above a legal threshold the stock is excluded; from 60% of a threshold it is flagged as elevated. A company statement that it was not a PFIC, for a year at most two years before the tax year, outweighs the estimate; a statement that it was one excludes the stock. Banks and insurers are not estimated: they rely on the active banking and insurance exceptions. · 26 U.S.C. §1297 — passive foreign investment company (official) · IRS — Instructions for Form 8621 (PFIC) (official) · Ipanema Partners — PFIC rules for US expats · 26 CFR §1.1297-1 — definition of a PFIC (income and asset tests) (official) · 26 CFR §1.1297-4 — qualifying insurance corporation (official)

Building a portfolio without PFICs? The investment planner only suggests PFIC-screened stocks that fit your tax situation in France or the UK.

Educational tool, not tax advice. PFIC status is decided each year on figures only the company has; check its annual report or ask an expat tax adviser before you rely on it.