Topic · France
PFICs in France: SICAV, FCP, UCITS ETF and the Form 8621 each one brings
Why nearly every fund a French bank or broker sells is a passive foreign investment company for a US person, which French products hold them, and how the regime you choose sets the income the NIIT reaches.
By Danilson Ramos · Founder, Atamatax
Published June 2026 · Updated November 2026
Part of the France desk — every US tax topic for France in one place.
Check it for your own holding
Could this investment be a PFIC?
Two questions and, if you have it, the ticker or ISIN. The read is immediate, nothing you enter leaves this page, and it names what would settle the rest.
Free, no account, nothing you answer leaves this page. Open the full portfolio scanner
Screened against the fund registry on this page. It is never sent anywhere.
A screen. Whether a fund is a PFIC turns on its own annual income and asset facts under §1297; the read above says how far your answers go and what would settle the rest.
Ask a French bank for an investment and you will be offered an OPCVM — a SICAV or an FCP — or a UCITS ETF from Amundi, Lyxor or BNP Paribas Easy. Ask a French online broker and the shelf is the same, because PRIIPs rules keep US-domiciled ETFs off it. Ask for a PEA and the law itself requires European securities. For a French investor this is the market; for a US citizen in France it is a machine for producing PFICs.
Why a French fund is a PFIC
A foreign corporation is a PFIC if 75% or more of gross income is passive or 50% or more of assets produce, or are held to produce, passive income. A SICAV is a corporation whose income is entirely dividends, interest and gains and whose assets are entirely securities — it meets both tests every year. An FCP has no legal personality under French law; for US purposes it is treated as a foreign fund entity and reaches the same result, though a reviewer confirms the entity-classification point for an unusual FCP. A UCITS ETF is one or the other, listed. What the fund tracks — the CAC 40, the S&P 500, a bond index — is irrelevant.
| Held in France | PFIC? | Why |
|---|---|---|
| Shares in LVMH, TotalEnergies, Sanofi | No | Operating companies fail the PFIC tests |
| A French government or corporate bond | No | Debt, not stock in a corporation |
| Amundi MSCI World UCITS ETF (Luxembourg) | Yes | A non-US pooled fund |
| Lyxor CAC 40 ETF (France) | Yes | Same |
| Amundi PEA S&P 500 (synthetic, PEA-eligible) | Yes | Tracking US stocks does not make it a US fund |
| A bank's FCP in a PEA or assurance-vie | Yes | Same |
| Vanguard S&P 500 ETF (VOO) at Interactive Brokers | No | US-domiciled; the account is still reportable |
| A SCPI | Different question | A société civile is a partnership by default — Form 8865, pass-through rents |
Where they hide
- The PEA — required by law to hold European securities; a PEA of ETFs is a PEA of PFICs. The PEA and US tax.
- The assurance-vie — the unit-linked allocation is a list of FCPs and ETFs; on the look-through view each is a PFIC. Assurance-vie and US tax.
- The CTO — whatever the broker sold. Directly held shares are fine; the funds are not.
- The PER and the PEE/PERCO — fund-based, though a treaty-qualified pension plan can excuse the Form 8621 (Reg. §1.1298-1(c)(4)); an employee savings plan's FCPE cannot.
The three regimes, and the NIIT
| Regime | Chapter 1 result | Net investment income? |
|---|---|---|
| §1291 default | Gain and excess distributions allocated over the holding period, taxed at the top rate for each prior year plus §6621 interest; the current-year slice is ordinary income | Yes — the gain treated as an excess distribution, and any dividend portion (Reg. §1.1411-10(c)); the deferred tax and interest are tax, not income |
| Mark-to-market (§1296) | Year-end gain included as ordinary income; losses to the extent of prior inclusions | Yes — as net gain (Reg. §1.1411-10(c)(2)(ii)) |
| QEF (§1295) | Pro-rata share of ordinary earnings and net capital gain, from the fund's annual information statement | Only with the §1.1411-10(g) election; otherwise the later distribution counts |
French funds almost never issue the PFIC annual information statement a QEF election needs, so the practical choice is between §1291 and mark-to-market — and the mark-to-market election is available only for marketable stock, which a listed ETF is and a bank's FCP may not be. The regime is chosen fund by fund, and the Form 8960 figure is built from the result.
What to do
- List every fund across the PEA, the CTO, the assurance-vie and any plan, with its ISIN from the annual statement.
- Screen each one: US-domiciled or not, fund or operating company.
- For each PFIC, check whether a prior election is in place and whether mark-to-market is available (listed = marketable).
- Gather purchase dates, cost, sales and distributions for the year — the §1291 computation needs the whole holding period.
- Compute Form 8621 per fund, then Form 8960 on the resulting income, then Form 1116 against the regular tax.
Which of your French funds are PFICs?
Paste the ISINs from your IFU or PEA statement; the free scanner reads the domicile and structure of each and says which need a Form 8621.
From one fund to the whole case
What does your PFIC situation actually require?
Four questions — how many funds, for how long, whether Forms 8621 were ever filed, whether the returns are current — and a route into the preparation that fits, with what it costs. Nothing you answer leaves this page.
Free, no account, nothing you answer leaves this page. Open the full portfolio scanner
A routing read, not a determination. Whether a fund is a PFIC, whether an exception applies and what a prior year needs are established when the holdings are screened; the route above says where that happens and what it costs.
Authorities cited
- IRC §1297 — IRC §1297 — Definition of a passive foreign investment company
- IRC §1291 — IRC §1291 — Interest on tax deferral (excess-distribution regime)
- IRC §1295 — IRC §1295 — Qualified Electing Fund (QEF) election
- IRC §1296 — IRC §1296 — Mark-to-market election for marketable PFIC stock
- IRS Form 8621 — About Form 8621 — Information Return by a Shareholder of a PFIC or QEF
- 26 CFR §1.1411-10 — 26 CFR §1.1411-10 — Controlled foreign corporations and passive foreign investment companies (QEF, mark-to-market and §1291 amounts in net investment income; the §1.1411-10(g) election)
- 26 CFR §1.1298-1 — 26 CFR §1.1298-1 — Section 1298(f) annual reporting; §1.1298-1(c)(4) exception for PFIC stock held through a treaty-qualified foreign pension fund
- IRC §1411 — IRC §1411 — Net Investment Income Tax (3.8%)
- Form 8865 — Form 8865 — Return of U.S. Persons With Respect to Certain Foreign Partnerships
- Christensen v. United States (Fed. Cir. 2026) — Christensen v. United States, No. 24-1284 (Fed. Cir. Aug. 31, 2026) (precedential) — the U.S.–France treaty's Article 24(2)(a) and 24(2)(b) credits are subject to the Code's §§27/901(a) limitation and do not offset the §1411 net investment income tax; reversing 168 Fed. Cl. 263 (2023)
- service-public.fr · PEA — République française — Plan d'épargne en actions (PEA): fonctionnement et fiscalité
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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