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
A PFIC is a non-U.S. trust or corporation held by a U.S. person that meets one of the following criteria:
- 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).
- 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.
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:
- Qualified Electing Fund (QEF) election
- Mark-to-market election
- Excess distribution method
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.
|Ticker||Vanguard ETF||Tax year|
|VCN||FTSE Canada All Cap Index ETF||2015||2016||2017|
|VCE||FTSE Canada Index ETF||2015||2016||2017|
|VRE||FTSE Canadian Capped REIT Index ETF||2015||2016||2017|
|VDY||FTSE Canadian High Dividend Yield Index ETF||2015||2016||2017|
|VIU||FTSE Developed All Cap ex North America Index ETF||2015||2016||2017|
|VI||FTSE Developed All Cap ex North America Index ETF (CAD-hedged)||2015||2016||2017|
|VDU||FTSE Developed All Cap ex U.S. Index ETF||2015||2016||2017|
|VEF||FTSE Developed All Cap ex U.S. Index ETF (CAD-hedged)||2015||2016||2017|
|VA||FTSE Developed Asia Pacific All Cap Index ETF||2015||2016||2017|
|VAH||FTSE Developed Asia Pacific All Cap Index ETF (CAD-hedged)||—||2016||2017|
|VE||FTSE Developed Europe All Cap Index ETF||2015||2016||2017|
|VEH||FTSE Developed Europe All Cap Index ETF (CAD-hedged)||—||2016||2017|
|VEE||FTSE Emerging Markets All Cap Index ETF||2015||2016||2017|
|VXC||FTSE Global All Cap ex Canada Index ETF||2015||2016||2017|
|VLQ||Global Liquidity Factor ETF||—||2016||2017|
|VVO||Global Minimum Volatility ETF||—||2016||2017|
|VMO||Global Momentum Factor ETF||—||2016||2017|
|VVL||Global Value Factor ETF||—||2016||2017|
|VFV||S&P 500 Index ETF||2015||2016||2017|
|VSP||S&P 500 Index ETF (CAD-hedged)||2015||2016||2017|
|VGG||U.S. Dividend Appreciation Index ETF||2015||2016||2017|
|VGH||U.S. Dividend Appreciation Index ETF (CAD-hedged)||2015||2016||2017|
|VUN||U.S. Total Market Index ETF||2015||2016||2017|
|VUS||U.S. Total Market Index ETF (CAD-hedged)||2015||2016||2017|
|VAB||Canadian Aggregate Bond Index ETF||2015||2016||2017|
|VCB||Canadian Corporate Bond Index ETF||—||—||2017|
|VGV||Canadian Government Bond Index ETF||—||—||2017|
|VLB||Canadian Long-Term Bond Index ETF||—||—||2017|
|VSB||Canadian Short-Term Bond Index ETF||2015||2016||2017|
|VSC||Canadian Short-Term Corporate Bond Index ETF||2015||2016||2017|
|VSG||Canadian Short-Term Government Bond Index ETF||—||—||2017|
|VBG||Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged)||2015||2016||2017|
|VBU||U.S. Aggregate Bond Index ETF (CAD-hedged)||2015||2016||2017|
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.