Topic · Switzerland
PFICs & Swiss Investments for U.S. Persons
Why Swiss and European funds are often PFICs, what Form 8621 means, and how to check your holdings before filing.
By Danilson Ramos · Founder, Atamatax
Updated July 2026
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One of the biggest surprises for Americans investing in Switzerland is the PFIC regime. A PFIC (passive foreign investment company) is, in practice, most non-U.S. pooled funds — and U.S. tax treats them unfavorably.
Why a Swiss or European ETF is usually a PFIC
PFIC status turns on the fund's structure and non-U.S. domicile, not on what it invests in. A Switzerland- or Ireland-domiciled ETF — even one tracking U.S. stocks — is generally a PFIC for a U.S. person who holds it.
What a PFIC means at filing time
- Each PFIC generally needs its own Form 8621.
- Without an election, the default rules can be punitive.
- Elections (QEF, mark-to-market) change the treatment but have requirements.
What to check
List every fund/ETF you hold, including inside an invested pillar 3a. The free Tax Risk Check flags whether a PFIC review is likely worthwhile for you.
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 §1295 — IRC §1295 — Qualified Electing Fund (QEF) election
- IRC §1296 — IRC §1296 — Mark-to-market election for marketable PFIC stock
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.
Atamatax provides tax preparation support and educational resources. This website does not constitute legal or tax advice.