• Benefits of non-PFIC
  • Any income distributed to U.S. shareholders will be treated as a “qualified dividend,” meaning it will be taxed at the more favorable capital gains rate rather than as ordinary income.
  • No need to file Form 8621, which PFIC shareholders must file annually.
  • Income in a Non-PFIC may be deferred until repatriated (if not also a CFC or subject to other anti-deferral rules). PFICs force income recognition (via elections or excess distribution rules), removing this flexibility.
• If you are a PFIC, you need to pickup the income on your tax returns
  • If you have more than 75% of your income is passive, you are PFIC
  • If 50% of your assets are passive, you are PFIC
• IP is an “active asset”
• You don’t have a PFIC issue for the first year
• IP is an “active asset”
• For US investors, once you have a PFIC and you don’t deal with it, you won’t get capital gains treatment
• You cure PFIC by making an election