Do You Own Taiwan ETFs? You Might Need to File IRS Form 8621!
If you’re a U.S. tax resident (including 1040 filers, green card holders, or long-term residents) and you invest in Taiwan-based ETFs, read this carefully!
1. Most Taiwan ETFs Are Considered PFICs
According to the IRS:
If a fund earns most of its income from passive sources (interest, dividends, capital gains), it is classified as a Passive Foreign Investment Company (PFIC).
→Most ETFs based in Taiwan, Ireland, Luxembourg, etc., fall under this category.
2. You May Need to File Form 8621 If Any of the Following Apply:
(1) You sold your Taiwan ETF (gain or loss doesn’t matter)
(2) You received dividends or distributions
(3) The ETF’s market value exceeds $25,000 (or $50,000 jointly)
(4) You made a QEF or MTM election for the investment
→ If any of these apply, filing Form 8621 is recommended!
3. When You Might Be Exempt:
• You’re a non-resident alien (NRA) and file Form 1040NR
• Your ETF holdings are small, not sold, and didn’t pay distributions
• You only hold U.S.-domiciled ETFs (e.g., U.S. versions of Vanguard or iShares)
USCPA Sophie Luo (羅霞) reminds you that Form 8621 is complex. It may involve multi-year lookback taxes and interest charges. Filing it wrong could lead to penalties. Always consult a qualified CPA!
If you have any questions or need further help,
please contact us at the USCPA Sophie Luo (羅霞) +886 980919600
or Email: ustaxproservice@gmail.com
Also welcome to visit our website: https://www.ustaxproservice.com
(USTAX Service LLC)