Impact of Pensiones Voluntarias in Colombia on US Tax returns

Pensiones Voluntarias ultimately results in contributions being effectively invested in shares of non-U.S. mutual funds. The problem with doing so is that the IRS treats foreign mutual funds as a Passive Foreign Investment Company (PFIC) and imposes a special, harsh tax regime on all US taxpayers who invest in PFIC’s.

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What is a PFIC ?!

What is a PFIC ?! It is one of the tools the US Government uses to discourage funds leaving the US economy. Read this article for a full explanation

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