Vanguard has chosen to proactively provide Passive Foreign Investment Company (PFIC) annual information statements. These statements apply only to U.S. persons who are unitholders of our Canada-domiciled exchange-traded funds (ETFs) and who file a U.S. income tax return with the Internal Revenue Service.
We will provide PFIC statements for our ETFs prior to the April U.S. tax reporting deadline.
All files are downloadable/viewable PDFs
A PFIC is a non-U.S. trust or corporation held by a U.S. person that meets one of the following criteria:
Canadian mutual fund trusts (including ETFs) and mutual fund corporations are considered PFICs and, therefore, are subject to the PFIC rules.
Only U.S. persons are affected by the PFIC rules. A U.S. person includes a U.S. citizen, U.S. green card holder, U.S. resident and other persons with a substantial connection to the U.S. A Canadian who spends a significant amount of time in the U.S. (i.e. more than 183 days in the calendar year) may be considered to be a U.S. person for purposes of the PFIC rules.
There are three primary methods of PFIC reporting available to U.S. persons:
Vanguard uses the QEF election method to provide PFIC reporting data.
PFIC annual information statements contain reporting information that enables investors classified as U.S. persons to treat a fund or ETF as a Qualified Electing Fund (QEF) and file an election with their U.S. tax returns. Whether the QEF election is appropriate for you depends on your personal circumstances. The QEF election is the only way that the appreciation in a fund's value can be eligible to be treated as a capital gain for U.S. taxation.
Year-end PFIC statements for each tax year are expected to be posted on the Vanguard Canada site on or about March 31 of the following year.