Visa holders · From Europe
The US has no tax treaty with the EU as a whole. After moving to the US from Europe, taxes on your pension and gains depend on your own country’s treaty, where one exists.
The US rules for funds you hold directly do not change with the country you leave. Under them, a UCITS fund or ETF usually counts as a passive foreign investment company (PFIC).
Updated · Sources
Europe and the US, in three numbers
- 24
- European countries have a Social Security agreement with the US. Each one decides which country’s Social Security tax you pay.
- 27 of 30
- EU and EEA countries have an income tax treaty with the US in force, as of October 2026.
- $10,000
- across all your foreign accounts, counted at each one’s peak, makes an FBAR due for the year.
A 2026 FBAR is due April 15, 2027, and moves to October 15 without any request.
How does the US treat the money you keep in Europe?
The US counts your days here under the substantial presence test. Once you pass it, your residency starting date is usually your first day in the US that year. With a green card, it is your first day here as a permanent resident. If you meet both tests that year, the earlier date applies.
Income that arrives after your residency starting date
From your residency starting date, the US taxes what you receive from home, even pay you earned before the move. Gains on funds or shares you sell before that date, and payouts you receive before it, are generally outside US tax.
An account your home country exempts from tax
A tax-free account at home is tax-free only in your home country. Unless your treaty covers the account, the US taxes its interest and dividends as they arise and its gains on each sale. Funds held inside it still usually count as PFICs.
A pension plan at home you keep paying into
Some treaties let you deduct what you keep paying into a pension plan at home on your US return, within US limits. You or your employer must have paid into the plan before your US work began, and the US competent authority must accept the plan. Under several treaties, the deduction ends once you hold a green card.
A $300,000 gift from your parents owes no US tax, yet a Form 3520 filed five months late can cost $75,000.
A gift or inheritance is not income for US tax (IRC § 102). A US resident still reports gifts on Form 3520 once one foreign individual and that person’s relatives give more than $100,000 in a year.
Reported on time
$0
Form 3520 for 2026 is due April 15, 2027, or October 15, 2027, if you extend your return.
One month late
$15,000
The penalty counts the whole $300,000, including the first $100,000.
Three months late
$45,000
Each further month the report stays missing adds the same amount again.
Five or more months late
$75,000
The penalty stops at this amount, however late the report is.
IRC § 6039F(c) charges 5% of the unreported gifts for each month the failure continues, up to 25% in total. The IRS can waive the penalty for reasonable cause. Your parents’ own country may tax the gift under its law. Most of the country pages below explain that country’s gift or inheritance tax.
What does a tax treaty with your home country change once you live in the US?
Most treaty benefits stop at the saving clause, which keeps you taxable in the US as a resident, with a short list of exceptions. Not every treaty has one, and depending on the treaty, the clause binds only the US or both countries.
| With a treaty | With no treaty | |
|---|---|---|
| A state pension from home | Set by the treaty It may give the pension to your home country, the US or both | US tax as a foreign annuity Your home country can tax it too |
| Growth inside a workplace pension plan | Deferred under some treaties Funds held in such a plan then need no Form 8621 | No treaty deferral Funds held in the plan can need Form 8621 |
| Dividends and interest from home | Home tax capped at treaty rates | Home tax at its full rates |
| Resident in both countries at once | A tie-breaker usually assigns you to one | No tie-breaker Both can tax you as a resident |
| Relief from double tax | Treaty rules and the foreign tax credit | The foreign tax credit only |
Income tax treaties generally leave Social Security tax out. Where a totalization agreement exists, it decides where you pay it.
Where European savings habits break under US rules.
Assuming an ETF that never pays out escapes the PFIC rules
An accumulating UCITS ETF reinvests its income, yet the PFIC rules still reach your gain when you sell. With no election, the part of that gain assigned to your earlier US-resident years is taxed at each year’s top rate, plus interest.
Treating a pension plan as outside Form 8938
Your state pension stays off Form 8938, but a workplace pension plan goes on it next to your accounts. The plan counts toward the form’s thresholds with everything else you hold abroad.
Accepting too much withholding at home
A payer at home may withhold its full domestic rate on your dividends or interest until you claim the treaty rate. The US gives no credit for the excess, because it treats tax you could have reclaimed as a voluntary payment (Treas. Reg. § 1.901-2(e)(5)). Reclaim it from your home country’s tax office instead.
Forgetting securities and insurance accounts
An FBAR for your European accounts covers securities accounts, pooled fund accounts and cash-value life insurance, as well as bank accounts. You generally list each one on the form, down to the smallest. With 25 or more accounts, you may give only their number and basic details.
Whichever European country you left, we prepare the US side and file a Form 8621 for each UCITS fund.
Valim is a US CPA firm for people who move from any European country. Your accountant in Europe keeps filing the return there, and we work alongside them.
- From the year you arrive, which often needs a dual-status return, we prepare every federal and state income tax return you owe.
- Your European accounts go on the FBAR we file, and on Form 8938 when your foreign assets pass its thresholds. Each UCITS fund or ETF gets the Form 8621 it generally needs every year.
- We add Form 5471 where a company you own abroad needs one, and Form 3520 once family gifts pass $100,000 in a year. Your quote adds a set amount for each account and each fund, and for each company in which you own more than 20%.
- We claim the tax your home country keeps on rent, dividends or a pension as a credit on Form 1116. We count only what its law and any treaty let it keep.
- Ahead of your residency starting date, we compare the US tax on selling a fund now with the tax on holding it. We also plan the quarterly estimated tax on rent or a pension paid from home.
- A notice from the IRS or a state on a return we prepared gets our answer within the fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
Which European country are you leaving?
These nine European countries have a page of their own. For any other, start with its treaty on the IRS list, if it has one.
Moving from the UK
Start here for the US tax on an ISA and a UK pension, and for how long UK tax can follow you.
Moving from Switzerland
It shows how to time a pillar 2 payout around your US residency starting date, and how to reclaim Swiss tax.
Moving from Poland
It explains why the 1974 treaty still applies, and what that means for a ZUS pension and PPK savings.
Moving from Germany
See how Germany’s exit tax works, and how the treaty can raise your US basis to match.
Moving from France
It tests an assurance vie and a PEA against US rules, and explains when France cancels its exit tax.
Moving from the Netherlands
It covers the Dutch tax bill on a workplace pension, and what box 3 still taxes once you live in the US.
Moving from Spain
Learn what a traspaso between funds costs a US resident, and how Spain taxes a flat you keep there.
Moving from Ireland
It sets out how long Irish ordinary residence lasts, how Irish-domiciled ETFs are taxed, and when CAT reaches a gift from your parents.
Moving from Italy
Read it before you rely on AIRE registration to end your Italian tax residence, or draw TFR severance.
Which US tax questions apply wherever in Europe you lived?
Are European ETFs PFICs?
Usually, yes: once you are a US resident, a UCITS fund or ETF counts as a PFIC. It exists only to invest in securities, so its income and assets are passive, and US entity rules usually treat it as a corporation. Each such fund generally needs its own Form 8621 every year. A qualified electing fund (QEF) election needs a PFIC Annual Information Statement from the fund. Mark-to-market fits only regularly traded or qualifying funds, and it taxes each year’s gain as ordinary income.
How are European pensions taxed after I move to the US?
A European pension is taxed under your country’s treaty with the US, which may give it to one country or let both tax it. With no treaty rule, the US taxes a foreign state pension under the annuity rules. A treaty may instead exempt it, or tax it like US Social Security, of which at most 85% is taxable. A treaty can defer US tax on growth inside a workplace plan, but only if the saving clause lists that rule as an exception. Without such a rule, US law alone decides how the plan’s growth is taxed.
Do I pay an exit tax when I leave Europe for the US?
You pay an exit tax on leaving Europe only if your home country has one and you meet its tests. Those tests usually combine years of residence there with the size of your holdings. Several European countries then treat shareholdings, and some fund units, as sold on the day your residence ends. The US still measures a later gain from what you paid, since moving here does not reset your cost basis. Only some treaties let you elect the value your home country taxed as your US basis instead.
How many European countries have a totalization agreement with the US?
As of October 2026, 24 European countries have a totalization (Social Security) agreement with the US, the newest since September 1, 2026. An agreement assigns your Social Security contributions to one country, usually the one where you work. Most also let an employer’s temporary posting keep you in your home system, proven by a certificate of coverage. Eight EU and EEA countries have no agreement. Workers from those countries have no certificate to claim, so they generally pay US Social Security and Medicare tax on US wages.
Sources
- IRS, United States income tax treaties, A to Z
- Directive 2009/65/EC (the UCITS Directive), Article 1
- Social Security Administration, totalization agreements overview
- 26 C.F.R. § 301.7701-3, Classification of certain business entities
- 26 U.S.C. § 1297, Passive foreign investment company
- 26 U.S.C. § 1291, Interest on tax deferral
- 26 U.S.C. § 1295, Qualified electing fund
- 26 U.S.C. § 1296, Election of mark to market for marketable stock
- 26 C.F.R. § 1.1298-1, Section 1298(f) annual reporting for PFIC shareholders (Form 8621)
- IRS, Instructions for Form 8621 (Rev. December 2025)
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- 31 C.F.R. § 1010.306, Filing of reports
- IRS, Instructions for Form 8938
- IRS, Instructions for Form 3520 (Rev. December 2025)
- 26 U.S.C. § 6039F, Notice of large gifts received from foreign persons
- 26 U.S.C. § 102, Gifts and inheritances
- 26 U.S.C. § 1012, Basis of property: cost
- IRS, Publication 915, Social Security and Equivalent Railroad Retirement Benefits
- IRS, Publication 519 (2025), U.S. Tax Guide for Aliens
- 26 C.F.R. § 301.7701(b)-4, Residency time periods
- 26 C.F.R. § 301.7701(b)-7, Coordination with income tax treaties
- 26 C.F.R. § 1.901-2, Income, war profits, or excess profits tax paid or accrued
Reviewed and updated October 2026. General information, not advice for your situation.