Industry & retail super
Underlying unlisted property and infrastructure holdings are commonly PFIC candidates — subject to the wrapper characterisation, which decides whether they reach you at all. We surface the line items in your member statement.
Convention 1982 · IRS × ATO
The US–Australia tax treaty, for Americans in Australia.
Super isn't tax-free to the IRS either.
We surface what your super is invested in, and prepare Form 8621 worksheets for the holdings that need them.
Australia-US Convention 1982 + 2001 Protocol covers dividends, interest, pensions and capital gains — it does not address superannuation, which is the desk's central point. Super's US characterisation is genuinely unsettled; we detect it and route the trust forms to a CPA, and prepare the PFIC side ourselves.
Free PFIC scan · Pay to generate the draft package · Mapped Forms 8621 / 8938 / FBAR / 1116 / 8833
This desk covers the treaty only. For Australian accounts, investments and pensions, see the Australia country desk.
Quick situation map
If you live in Australia and are a U.S. person
The treaty can relieve double taxation, but it does not replace a U.S. return or separate account and investment reporting. Which forms apply depends on your status, income, accounts and plan documents.
| Situation | Possible U.S. issue |
|---|---|
| Australian super | Treaty and plan classification; account reporting may apply; underlying funds can raise PFIC questions. |
| Australian ETF or managed fund | Possible PFIC analysis and Form 8621, depending on the fund and your facts. |
| Australian bank and investment accounts | FBAR and Form 8938 have separate rules and thresholds. |
| Salary and Australian tax paid | Form 2555 or Form 1116 may be relevant; the best fit depends on the return. |
| Dividends and investment income | U.S. reporting continues; foreign tax credits may help with double taxation. |
| Australian company ownership | Form 5471 or another information return may apply, depending on the entity and ownership. |
What we handle for Australian residents
The three things that bite US citizens in Australia.
Franking credits
Imputation credits do not translate to the IRS. The company tax behind them was paid by the company, not by you, and IRC §901 credits only tax the taxpayer paid — so a franked dividend can be taxed by the US with little or no Australian tax to offset it.
CGT discount mismatch
ATO's 50% CGT discount has no US equivalent. We compute the IRS basis separately and flag where the bracket differs.
Direct answer
Does the US–Australia treaty mean I do not file a US return?
No. Every US income-tax convention carries a saving clause that lets the United States tax its own citizens and green-card holders as if the treaty had not entered into force, with a short list of exceptions. The 1982 convention with Australia decides which country taxes an item first and how double taxation is relieved — usually as a credit on the return you still have to file. Three things it does not do:
It does not remove the filing requirement
The saving clause keeps a US citizen in Australia inside the US system. Relief for Australian tax arrives on Form 1116 (or, for earned income, Form 2555) — on a return, not instead of one.
It does not decide PFIC status
Whether a Australian fund or ETF is a passive foreign investment company is a question of US domestic law (IRC §1297), and a treaty does not displace it. A fund inside a local wrapper still reaches Form 8621.
It does not replace the FBAR or Form 8938
The FBAR is a Bank Secrecy Act report to FinCEN and Form 8938 is a return attachment under IRC §6038D; neither is a treaty matter, and Australia's own foreign-asset filings do not satisfy either.
Filing from Australia
What the treaty leaves on a return filed from Australia.
The convention changes how items are taxed; it does not shorten the list of what is reported. A US citizen resident in Australia typically files:
- Form 1040 on worldwide income, with Schedule B's foreign-account questions answered.
- Form 1116 for the credit on Australian income tax — or Form 2555 for earned income, where the exclusion is the better fit.
- The FBAR when non-US accounts together exceeded the threshold at any point in the year, and Form 8938 at its own, higher thresholds.
- Form 8621 for each non-US fund, and Form 8833 only where a treaty position overrides the default.
Missed years change the order: the catch-up route comes first, then the current return.
Other treaty desks
Same workflow, different bilateral convention.
SwitzerlandConvention 1996DenmarkConvention 1999ItalyConvention 1999GermanyConvention 1989United KingdomConvention 2001FranceConvention 1994CanadaConvention 1980
Not sure which desk applies? Every country desk in one place.
Australia treaty · FAQ
What US citizens in Australia ask us most.
- Is my Australian super tax-free to the IRS?#
- No — it is not tax-free simply because Australia treats it that way. Beyond that, the US characterisation of superannuation is genuinely unsettled: it is commonly analysed as a foreign grantor trust, and the answer turns on the fund's terms and your level of control, so we do not state it as decided. The underlying unlisted property and infrastructure holdings are often PFICs. We prepare Form 8621 worksheets per fund; any foreign-trust filing is out of scope for the self-serve package and is routed for professional review.
- Do franking credits count on my US return?#
- Generally not. A franking credit represents company tax paid by the company; IRC §901 gives a foreign tax credit only for tax the taxpayer paid or accrued, and the indirect credit has never been available to individual shareholders. What may be creditable is Australian tax you actually bore — withholding on an unfranked distribution, or net tax assessed on you after the franking offset — subject to the US foreign-tax-credit rules. If the offset covers your Australian liability, or you are a non-resident whose fully franked dividend is exempt from withholding, there may be nothing left to credit.
- How is the 50% CGT discount handled?#
- The ATO's 50% CGT discount has no US equivalent, so we compute the IRS cost basis and gain separately and flag any holding where the US bracket differs from the Australian result.
Authorities cited
- 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 Form 1116 — About Form 1116 — Foreign Tax Credit (Individual, Estate, or Trust)
- IRS Form 8833 — About Form 8833 — Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)
- IRS Form 8621 — About Form 8621 — Information Return by a Shareholder of a PFIC or QEF
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.
Australia guides that go deeper
- Superannuation and US tax: compulsory in Australia, unsettled in the USYour 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.Read guide →
- Australian managed funds, ASX ETFs and the PFIC rulesAustralian 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.Read guide →
- Franking credits and US tax: the credit that does not cross the borderA 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.Read guide →
- FBAR for Americans in Australia: super counts tooAn everyday transaction account, an offset account against the mortgage and a superannuation balance will clear the FBAR threshold between them without anyone mentioning it.Read guide →
- Form 1116 for U.S. ExpatsWhat to collect, how income categories and the foreign-tax-credit limitation fit together, and where Atamatax can prepare supported Form 1116 inputs without guessing sourcing questions.Read guide →
- Form 8621 (PFIC): what it is, who files, and how to complete itThe IRS information return for passive foreign investment companies — who has to file, the $25k/$50k exception, and the three tax regimes (§1291, QEF, mark-to-market).Read guide →
Atamatax · run your Australia return
Free on-screen draft. Pay to generate the PDF package.
Scan your brokerage, see your PFIC count, review the forms with the right Australia treaty positions attached. You pay when you generate the draft PDF package. It maps supported figures to IRS forms and identifies items you or your CPA still need to complete.
What you walk out with
- · Form 1040 + schedules B, D, 1, 2, 3
- · One Form 8621 per PFIC (up to 25 per return)
- · Form 8938 (FATCA) when thresholds hit
- · FinCEN 114 (FBAR) threshold check and separate-filing guidance
- · Form 1116 with Australia tax credit allocated
- · Form 8833 when you take a treaty position