The United States has several anti-deferral regimes that apply to US persons who have business interests or investments outside of the United States. One of such anti-deferral regimes is what is called Passive Foreign Investment Company (“PFIC”) regime. For example, investments in foreign, including Canadian, mutual funds may constitute a PFIC investment and result in adverse US tax consequences for certain PFIC shareholders. Managing the respective US tax exposure and complying with applicable tax filing requirements would help avoid penalties on distributions and avoid potential adverse US tax consequences when no distributions took place.
How Can We Help!
We can help you with identifying US tax exposure related to PFIC issues and assist you in complying with applicable US tax laws and filing obligations. We can also advise you on tax-efficient structuring of your businesses or investments to effectively manage PFIC exposure.