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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.

Frequently asked questions

What is a PFIC?

A PFIC is a non-U.S. trust or corporation held by a U.S. person that meets one of the following criteria:

  1. Income test: At least 75% of its gross income in a given year is considered passive income (e.g. dividends, interest, rent, royalties and capital gains from the disposition of securities).
  2. Asset test: 50% or more of the assets for the year are held for the purpose of producing passive income.

Canadian mutual fund trusts (including ETFs) and mutual fund corporations are considered PFICs and, therefore, are subject to the PFIC rules.

When and to whom do the PFIC rules apply?

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.

What are the methods of PFIC reporting?

There are three primary methods of PFIC reporting available to U.S. persons:

  1. Qualified Electing Fund (QEF) election
  2. Mark-to-market election
  3. Excess distribution method

Vanguard uses the QEF election method to provide PFIC reporting data.

What are PFIC annual information statements, and when are they used?

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.

When are PFIC statements available on Vanguard's website?

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.

PFIC statements

Ticker Vanguard ETF Tax year
VCN FTSE Canada All Cap Index ETF 2015 2016 2017 2018
VCE FTSE Canada Index ETF 2015 2016 2017 2018
VRE FTSE Canadian Capped REIT Index ETF 2015 2016 2017 2018
VDY FTSE Canadian High Dividend Yield Index ETF 2015 2016 2017 2018
VIU FTSE Developed All Cap ex North America Index ETF 2015 2016 2017 2018
VI FTSE Developed All Cap ex North America Index ETF (CAD-hedged) 2015 2016 2017 2018
VDU FTSE Developed All Cap ex U.S. Index ETF 2015 2016 2017 2018
VEF FTSE Developed All Cap ex U.S. Index ETF (CAD-hedged) 2015 2016 2017 2018
VA FTSE Developed Asia Pacific All Cap Index ETF 2015 2016 2017 2018
VAH FTSE Developed Asia Pacific All Cap Index ETF (CAD-hedged) 2016 2017 2018
VE FTSE Developed Europe All Cap Index ETF 2015 2016 2017 2018
VIDY FTSE Developed ex North America High Dividend Yield Index ETF 2018
VEH FTSE Developed Europe All Cap Index ETF (CAD-hedged) 2016 2017 2018
VEE FTSE Emerging Markets All Cap Index ETF 2015 2016 2017 2018
VXC FTSE Global All Cap ex Canada Index ETF 2015 2016 2017 2018
VLQ Global Liquidity Factor ETF 2016 2017 2018
VVO Global Minimum Volatility ETF 2016 2017 2018
VMO Global Momentum Factor ETF 2016 2017 2018
VVL Global Value Factor ETF 2016 2017 2018
VFV S&P 500 Index ETF 2015 2016 2017 2018
VSP S&P 500 Index ETF (CAD-hedged) 2015 2016 2017 2018
VGG U.S. Dividend Appreciation Index ETF 2015 2016 2017 2018
VGH U.S. Dividend Appreciation Index ETF (CAD-hedged) 2015 2016 2017 2018
VUN U.S. Total Market Index ETF 2015 2016 2017 2018
VUS U.S. Total Market Index ETF (CAD-hedged) 2015 2016 2017 2018
VAB Canadian Aggregate Bond Index ETF 2015 2016 2017 2018
VCB Canadian Corporate Bond Index ETF 2017 2018
VGV Canadian Government Bond Index ETF 2017 2018
VLB Canadian Long-Term Bond Index ETF 2017 2018
VSB Canadian Short-Term Bond Index ETF 2015 2016 2017 2018
VSC Canadian Short-Term Corporate Bond Index ETF 2015 2016 2017 2018
VSG Canadian Short-Term Government Bond Index ETF 2017 2018
VBG Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged) 2015 2016 2017 2018
VBU U.S. Aggregate Bond Index ETF (CAD-hedged) 2015 2016 2017 2018
VEQT All-Equity ETF Portfolio
VBAL Balanced ETF Portfolio 2018
VCNS Conservative ETF Portfolio 2018
VCIP Conservative Income ETF Portfolio
VGRO Growth ETF Portfolio 2018

This material is for informational purposes only. This material is not intended to be relied upon as research, investment, or tax advice and is not an implied or express recommendation, offer or solicitation to buy or sell any security or to adopt any particular investment or portfolio strategy. Any views and opinions expressed do not take into account the particular investment objectives, needs, restrictions and circumstances of a specific investor and, thus, should not be used as the basis of any specific investment recommendation. Please consult your financial and/or tax advisor for financial and/or tax information applicable to your specific situation.