Do Americans living in Australia have to file a US tax return?

Generally yes. US citizens and green-card holders file on worldwide income wherever they live, and the 1982 Convention allocates taxing rights rather than removing the filing obligation. Australian income tax is high enough that the Foreign Tax Credit usually removes the US tax on salary — but the return, and the information forms that come with it, are still required.

Is my superannuation taxable to the IRS?

It depends on a characterisation the IRS has not settled. Super is analysed variously as a foreign grantor trust, an employees' trust under §402(b), or a pension within Article 18 of the 1982 Convention, and each answer taxes different things at different times. There is no ruling equivalent to Rev. Proc. 2014-55 for the Canadian RRSP. This is a position to take deliberately with a credentialed adviser rather than a box to tick.

Can I opt out of superannuation as a US citizen?

Generally no, and this is what makes Australia different from every other corridor. Superannuation Guarantee contributions are compulsory and your employer must pay them. The usual advice — hold a different wrapper — simply is not available, so the work is in taking a defensible position on the account you are required to have.

Are Australian managed funds and ASX ETFs PFICs?

Commonly, yes. Australian managed funds are typically unit trusts and ASX-listed ETFs are pooled vehicles; for US purposes such vehicles are generally treated as corporations, and they commonly meet the §1297 income test (75% or more of gross income is passive) or asset test (50% or more of assets produce, or are held to produce, passive income). Directly held shares in Australian operating companies are not PFICs.

Can I avoid the PFIC problem by buying US-listed ETFs through an Australian broker?

A US-domiciled fund is not a PFIC wherever the account sits, and Australia has no PRIIPs-style restriction keeping US-listed securities off retail platforms — so unlike in the EU, this is a real option. It is an investment decision with Australian tax, currency and US estate-tax consequences of its own, and it does nothing about funds you already hold.

Do Australian bank accounts count for the FBAR?

Generally yes. An everyday account, an offset account against a mortgage, a term deposit and a brokerage account at an Australian institution are all non-US financial accounts, and their combined peak value counts toward the $10,000 FinCEN Form 114 threshold. Superannuation is generally reportable too, independently of how its income is characterised.

Does the 50% CGT discount reduce my US tax?

No. The discount is an Australian mechanism with no US equivalent — the US applies preferential rates to the whole gain instead. The same disposal therefore produces a smaller Australian taxable gain and a larger US one, with correspondingly less Australian tax available to credit against it.

Can Americans in Australia use Streamlined procedures?

Living in Australia neither qualifies nor disqualifies you. The Streamlined Foreign Offshore Procedures require non-willful conduct and the non-residency test — no US abode and at least 330 full days outside the United States, in at least one of the last three years for which the return due date has passed. A qualifying taxpayer files the most recent 3 years of returns and the most recent 6 years of FBARs with a 0% offshore penalty, certifying non-willfulness on Form 14653.

Australia · US corridor

US taxes in Australia —
your super is compulsory, and its US treatment isn't settled.

A US citizen living in Australia generally stays inside the US federal filing system on worldwide income. Australian rates are high enough that the Foreign Tax Credit usually removes the US tax on salary — so the hard part isn't the tax on what you earn. It's the account your employer is required by law to pay into, and a dividend credit that looks like a foreign tax credit and isn't one.

Check my Australian filing The Australia treaty desk

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What actually applies

The layers an Australian return runs through.

Not everyone needs every form. These are the layers that come up most for Americans in Australia, and what makes each one bite here.

US filing layers that commonly apply to a US person living in Australia
Form	What it is	What makes it bite in Australia
Form 1040	The US federal return, on worldwide income.	Filed regardless of Australian residence. Note the year mismatch: Australia runs a July–June financial year and the US runs the calendar year, so Australian statements never line up with a US return without being re-cut.
Form 1116	Foreign Tax Credit for Australian tax you paid.	Australian income tax on salary is generally creditable and often exceeds the US tax on the same income. The franking credit itself is not tax you paid; any net Australian tax assessed on you after the offset is a separate FTC question.
Form 8621	One per PFIC per year, subject to the form's own triggers.	Australian managed funds, ASX-listed ETFs and LICs. A three-fund ASX portfolio is three forms a year, indefinitely.
FinCEN 114 (FBAR)	Foreign financial accounts above the aggregate threshold.	Everyday accounts, offset accounts, term deposits and superannuation. Measured on the calendar year, not the Australian financial year.
Form 8938	Specified foreign financial assets, on its own thresholds.	A separate test from the FBAR with a broader asset class, so the two do not move together.
Form 3520 / 3520-A	Foreign trust reporting, when the arrangement is classified as one.	Whether superannuation is a foreign trust for US purposes is genuinely unsettled — a real classification question, not a routine filing. Detected and routed for professional review; Atamatax does not prepare these forms.

The wrapper you didn't choose

Superannuation, and the two Australian mechanisms that don't travel.

Australia's tax system is coherent and, for residents, generous. Three of its central features have no US counterpart, and one of them is compulsory.

Super — compulsory, and unsettled

Superannuation Guarantee contributions are paid by your employer by law. You cannot decline the account, which is what separates this from every other problem wrapper in expatriate tax.

Its US characterisation is genuinely open — a foreign grantor trust, an employees' trust under §402(b), or a pension within Article 18. There is no ruling settling it, and the reading adopted in year one shapes every year after.

Franking credits — not a tax you paid

Imputation attaches company tax to a dividend, and Australian residents credit it against their own. IRC §901 credits only tax the taxpayer paid or accrued, and the indirect credit never reached individuals.

Where you live then decides the size of the problem. As an Australian resident you gross the dividend up and take the credit as an offset. When your Australian tax on that grossed-up income exceeds the offset, you bear net Australian tax personally — and that net tax may be creditable, subject to the US foreign-tax-credit rules. When the offset covers your Australian liability, and for a non-resident whose fully franked dividend has no withholding, there is nothing left to credit.

The 50% CGT discount — no US analogue

Australia discounts half a capital gain on assets held over twelve months. The US applies preferential rates to the whole gain instead — a different mechanism, not a matching one.

The same disposal produces a smaller Australian gain and a larger US one, so less Australian tax is available to credit against more US tax.

If you hold Australian funds

An ASX portfolio, or a super balance?

Every other country desk here can tell a reader to hold something else. Australia cannot: the account whose US treatment nobody has settled is the one an employer is legally required to fund. That is why superannuation comes before the holdings question on every page of this desk — the characterisation governs whether the pooled investments inside it produce annual PFIC consequences at all.

Outside super the answer is ordinary: Australian managed funds, ASX ETFs and LICs are non-US pooled vehicles, generally one Form 8621 each per year. Direct shares in BHP or CSL are not PFICs, and neither is a term deposit. Australia has no PRIIPs rule, so a US-listed ETF is genuinely available here — and is not a PFIC.

PFICs and Form 8621, in full Check my holdings

Free tool

Check what your Australian holdings actually are.

Paste your ASX codes or ISINs. Instrument type and domicile are review signals, not a classification — and superannuation is a prior question the tool flags rather than answers.

1 · Where do you live?

Where you live changes the products you are likely to hold and the guidance you get next. It does not change how the PFIC rules classify a holding — those turn on the fund, not your address.

2 · Where do you hold it?

3 · What do you hold?

Or paste your ISINs — one per line

Result

Tell us what you hold

Pick the closest match on the left, or paste your ISINs below and we'll flag each one.

More for US taxpayers in Australia: The Australia desk.

Educational estimate, not tax advice. Domicile is the fund's legal home, not the broker or exchange you used. Broker and provider policies change — confirm current terms with your provider before acting.

Years behind

The catch-up route from Australia.

Australia has a large population of dual and accidental citizens, and a bank asking you to certify your tax residency under FATCA is how many of them find out.

The treaty

The 1982 Convention, in brief.

US–Australia Convention 1982

The 1982 Convention, as amended by the 2001 Protocol, allocates taxing rights and provides relief from double taxation — for a US citizen, almost always as a credit on Form 1116. The saving clause preserves US taxation of its own citizens subject to the exceptions the convention lists.

Article 10 — dividends. Article 11 — interest. Article 13 — capital gains.
Article 18 — pensions, and the article superannuation is argued into. It was not drafted with compulsory super in view.
Article 22 — relief from double taxation, the route the Form 1116 credit runs through.
Nothing in the convention displaces the PFIC rules, which are US domestic law — and nothing in it makes a franking credit a tax you paid.

The Australia treaty desk, article by article →

The Australia treaty desk does the article-level work. This page exists for the broader question of what living in Australia does to a US return — starting with the account you did not choose.

The Australia desk

Every Australia–US guide on the site.

Superannuation and US tax: compulsory in Australia, unsettled in the US

Your employer must pay into your super by law. What the United States does with it is one of the genuinely unresolved questions in expatriate tax — and anyone who tells you it is settled is choosing a side.

Australian managed funds, ASX ETFs and the PFIC rules

Australian managed funds are unit trusts and ASX-listed ETFs are pooled vehicles. Both are ordinary Australian investments and both sit inside the US PFIC regime.

Franking credits and US tax: the credit that does not cross the border

A franking credit looks exactly like a foreign tax credit and behaves nothing like one. For an American holding Australian shares, that difference is the whole tax bill.

FBAR for Americans in Australia: super counts too

An everyday transaction account, an offset account against the mortgage and a superannuation balance will clear the FBAR threshold between them without anyone mentioning it.

Australia · US treaty desk

The 1982 convention and the 2001 protocol, article by article.

PFICs and Form 8621

What an Australian managed fund or ASX-listed ETF does to a US return.

FBAR & Form 8938 threshold checker

Test your Australian account balances against both thresholds.

Accidental Americans & dual citizens

US citizenship by birth, and what it means decades later.

All country desks

US filing abroad, adapted to where you live.

Other country desks

The layers a US return runs through don't change by country — what changes is which local accounts, funds and pensions actually trigger them. Here's how Australia compares.

Netherlands

Box 3 · 30% ruling · Dutch funds

Spain

Fondos de inversión · Planes de pensiones · PFIC

Switzerland

Pillar 3a · Swissquote · PFIC

Denmark

Saxo · Aktiesparekonto · Danish pensions

Italy

Italian funds · pensions · Quadro RW

US taxes in Australia — the questions we get

Do Americans living in Australia have to file a US tax return?#: Generally yes. US citizens and green-card holders file on worldwide income wherever they live, and the 1982 Convention allocates taxing rights rather than removing the filing obligation. Australian income tax is high enough that the Foreign Tax Credit usually removes the US tax on salary — but the return, and the information forms that come with it, are still required.
Is my superannuation taxable to the IRS?#: It depends on a characterisation the IRS has not settled. Super is analysed variously as a foreign grantor trust, an employees' trust under §402(b), or a pension within Article 18 of the 1982 Convention, and each answer taxes different things at different times. There is no ruling equivalent to Rev. Proc. 2014-55 for the Canadian RRSP. This is a position to take deliberately with a credentialed adviser rather than a box to tick.
Can I opt out of superannuation as a US citizen?#: Generally no, and this is what makes Australia different from every other corridor. Superannuation Guarantee contributions are compulsory and your employer must pay them. The usual advice — hold a different wrapper — simply is not available, so the work is in taking a defensible position on the account you are required to have.
Can I claim franking credits on my US return?#: The credit itself, no — it represents company tax paid by the company, and IRC §901 reaches only tax the taxpayer paid or accrued; the indirect credit never extended to individual shareholders. But if you live in Australia and are an Australian tax resident, you gross the dividend up by the credit and take it as an offset. When your Australian tax on that grossed-up income exceeds the offset, the remaining tax is borne by you and may be creditable on Form 1116, subject to the US foreign-tax-credit rules. If the offset covers the Australian liability, nothing is left to credit. A non-resident's fully franked dividend is generally exempt from Australian withholding under s 128B(3)(ga).
Are Australian managed funds and ASX ETFs PFICs?#: Commonly, yes. Australian managed funds are typically unit trusts and ASX-listed ETFs are pooled vehicles; for US purposes such vehicles are generally treated as corporations, and they commonly meet the §1297 income test (75% or more of gross income is passive) or asset test (50% or more of assets produce, or are held to produce, passive income). Directly held shares in Australian operating companies are not PFICs.
Can I avoid the PFIC problem by buying US-listed ETFs through an Australian broker?#: A US-domiciled fund is not a PFIC wherever the account sits, and Australia has no PRIIPs-style restriction keeping US-listed securities off retail platforms — so unlike in the EU, this is a real option. It is an investment decision with Australian tax, currency and US estate-tax consequences of its own, and it does nothing about funds you already hold.
Do Australian bank accounts count for the FBAR?#: Generally yes. An everyday account, an offset account against a mortgage, a term deposit and a brokerage account at an Australian institution are all non-US financial accounts, and their combined peak value counts toward the $10,000 FinCEN Form 114 threshold. Superannuation is generally reportable too, independently of how its income is characterised.
Does the 50% CGT discount reduce my US tax?#: No. The discount is an Australian mechanism with no US equivalent — the US applies preferential rates to the whole gain instead. The same disposal therefore produces a smaller Australian taxable gain and a larger US one, with correspondingly less Australian tax available to credit against it.
Can Americans in Australia use Streamlined procedures?#: Living in Australia neither qualifies nor disqualifies you. The Streamlined Foreign Offshore Procedures require non-willful conduct and the non-residency test — no US abode and at least 330 full days outside the United States, in at least one of the last three years for which the return due date has passed. A qualifying taxpayer files the most recent 3 years of returns and the most recent 6 years of FBARs with a 0% offshore penalty, certifying non-willfulness on Form 14653.

Authorities cited

IRC §1297 — IRC §1297 — Definition of a passive foreign investment company
IRS Form 8621 — About Form 8621 — Information Return by a Shareholder of a PFIC or QEF
IRC §1291 — IRC §1291 — Interest on tax deferral (excess-distribution regime)
IRC §1296 — IRC §1296 — Mark-to-market election for marketable PFIC stock
FinCEN Form 114 (FBAR) — Report of Foreign Bank and Financial Accounts (FBAR)
IRS Form 8938 — About Form 8938 — Statement of Specified Foreign Financial Assets
IRS Form 3520 — About Form 3520 — Annual Return To Report Transactions With Foreign Trusts
IRS Form 1116 — About Form 1116 — Foreign Tax Credit (Individual, Estate, or Trust)
US–Australia Income Tax Treaty — Convention between the United States and Australia (signed 1982), as amended by the 2001 Protocol
U.S.–Australia Totalization Agreement — U.S.–Australia Social Security (Totalization) Agreement
IRS Streamlined Foreign Offshore Procedures — U.S. Taxpayers Residing Outside the United States — Streamlined Foreign Offshore Procedures

Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.

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