This is a div block with a Webflow interaction that will be triggered when the heading is in the view.
A French executive moving to New York, a German engineer moving to Texas, a Dutch consultant moving to Boston, a Spanish researcher moving to Cambridge, each arrives with a different account structure, but the cross-border tax questions they face in their first US year rhyme more often than they differ. The UCITS ETF is a PFIC no matter which EU country issued it. The home-country pension needs a treaty position on the US return whether it is called a Riester, a PER, a Plan de Pensiones or a TFR. And the assurance vie or unit-linked policy that functions beautifully inside France or Italy may not meet the US definition of life insurance at all.
This article explains what a Continental European professional should understand about their finances before arriving in the United States. It is written for the most common country profiles, France, Germany, Netherlands, Spain, Italy, Belgium, and flags where the country-specific answer diverges. The aim is to help you walk into a pre-arrival conversation with a qualified US tax preparer and a cross-border adviser already knowing the questions that matter most in a first US filing year.
Country by country, the labels differ, but the account categories are recognizable. A workplace pension, either DC or DB, with a current or former employer. A personal retirement vehicle: a PlandÉpargne Retraite in France, a Rürup or Riester in Germany, a third-pillar plan in the Netherlands, a Plan de Pensiones in Spain, a fondo pensione in Italy. An EU-domiciled UCITS ETF or mutual fund portfolio. A life-insurance wrapper with underlying fund exposure, French assurance vie, Luxembourg-domiciled policies, Italian unit-linked contracts, Belgian tak-23 products. Bank accounts in one or more EU countries. For many, a primary residence kept rather than sold.
Each category behaves differently once the holder becomes a US tax resident. Some continue with a treaty-based position the US return has to document. Some lose their home-country advantage the moment US residency begins. A handful fall into US categories that are punitive and reporting-heavy. The sections below work through the ones that come up most often.
{{INSET-CTA-1}}
The United States has comprehensive income tax treaties with most large EU economies, France, Germany, Netherlands, Spain, Italy, Belgium among them. Each treaty contains a pension article, and each permits a treaty-based deferral of US tax on growth inside recognized home-country pension schemes. In plain English: interest, dividends and capital gains inside the home-country pension can continue to compound without US taxon accrual, provided the treaty position is taken on the US return. The scopeof what counts as a recognized scheme, and the mechanics of distribution taxation, vary country by country.
New home-country pension contributions generally require home-country earnings or residency. Once a corporate transferee moves to US payroll and home-country residency ends, contributions typically stop. Existing balances do not disappear, they just stop growing through new money.
Without a treaty position, the US default is to look through many foreign pensions and tax the growth as it accrues, year by year. Each relevant treaty's pension article is what prevents that outcome. Form 8833 is used to disclose the treaty-based return position. In my work with EU arrivals, the treaty position is routinely missed in the first US filing year, particularly where the pension sits in a different country to the arrival's main employment history.
When a pension pays out, the treaty governs which country has primary taxing rights, typically tied to residency at the time of payment and to whether the payment is a lump sum or periodic. A lumpsum paid before US residency begins commonly falls outside the US tax net. The same payment after US residency begins is a US-taxable event, with home-country with holding creditable through the Foreign Tax Credit. The calendar day matters as much as the amount.
EU-domiciled UCITS ETFs and mutual funds are almost always classified as Passive Foreign Investment Companies, or PFICs, under US rules, regardless of the issuing country. Whether the fund is Irish-domiciled, Luxembourg-domiciled, French-domiciled or German-domiciled, the PFIC regime typically applies. It taxes gains as ordinary income, applies an interest charge on deferred gains and requires an annual Form 8621 for each holding. A diversified EU-broker portfolio can contain ten or more separate PFICs. This is the largest pre-arrival cleanup conversation for most EU-origin arrivals.
Life-insurance wrappers are popular across Continental Europe, assurance vie in France, unit-linked contracts in Italy and Belgium (tak-23), Luxembourg-domiciled international policies. Many do not meet the US definition of life insurance under §7702. When they do not, the growth inside the policy can be taxable on the US return in ways the home-country paperwork never hints at, and the underlying fund exposure can itself be a PFIC. The policy that looked efficient inside France can be expensive in the US.
Direct holdings of home-country shares and bonds sit outside the PFIC regime. Dividends and coupons become US-taxable from the residency start date. Home-country withholding, French prélèvement, GermanKapitalertragsteuer, Dutch dividend tax, Spanish retenciones, Italian ritenuta, generally flows through the Foreign Tax Credit, though treaty reduced-rate claims often require home-country paperwork that is easier to complete before the move.
Cost basis on appreciated home-country holdings does not reset on the day US residency begins. A sale after US residency begins is a US-taxable gain measured from the original purchase price. A home-country primary residence sold before US residency begins typically does not touch the US return. Kept and rented, the income becomes US-taxable with home-country tax credited through the FTC, covered in the foreign rental piece in this series. Currency matters here too: a euro-denominated mortgage paid off during US residency can generate a US-taxable foreign currency gain under §988.
Three reporting forms commonly apply. FBAR, FinCEN Form 114, applies when aggregate foreign financial accounts exceed the FinCEN-published threshold at any point in the year. The typical EU pattern of a home-country current account, a savings account, a brokerage account and a pension makes the threshold easy to cross. Form 8938 applies at higher FATCA thresholds. Form 8833 discloses treaty-based positions, including the pension growth deferral. Missing FBAR carries penalty exposure far out of proportion to the cost of filing it.
Under the substantial presence test, the default start date is the first day of physical US presence in the calendar year of arrival. Election options, the first-year choice and dual-status filing, can move that date. A pre-arrival stock sale, pension lump sum or fund disposal can land on either side of the residency line depending on the day of the move.
{{INSET-CTA-2}}
Illustrative summary of common EU-origin accounts and their US treatment for a new US tax resident. Country-specific rules vary; the relevant US income tax treaty and the IRS publications are the authoritative sources for the rules in force at any point in time.
Source: Skybound 2026
For an EU professional thinking through a pre-arrival checklist, questions worth raising with a qualified US tax preparer and a cross-border adviser include:
Tom Pewtress is Head of USA at SkyboundWealth USA and a member of the Skybound Wealth Management Executive Committee.A fee-based fiduciary adviser with more than a decade advising internationallymobile households, Tom helps US citizens, dual-nationals, green card holders,and families moving to or from the United States align their wealth, taxposition, and long-term plans across borders.
His work focuses on the issues cross-borderclients actually face: 401(k) and IRA decisions when leaving the US, Rothconversion strategy, tax-aware investing across jurisdictions, PFIC andforeign-fund pitfalls, Social Security totalization, and estate planning forfamilies with ties to more than one country.
Tom regularly writes and speaks oncross-border financial planning. He also leads Skybound's global training andproposition work, ensuring the firm's financial planners remain highlytechnically capable in the industry.
This article is for educational andinformational purposes only and does not constitute personalized investment,tax, or legal advice. Tax and regulatory rules change frequently and theirapplication depends on individual circumstances. Readers should consultqualified professionals before making any financial decisions. Skybound WealthUSA is an SEC-registered investment adviser; registration does not imply anylevel of skill or training.
Most European movers underestimate how PFIC rules and non-qualified pension treatment will reshape their portfolio the day they become US tax residents.
A short conversation with Tom can give you a clearer picture of where you stand and what is worth acting on first.
A European move to the US is largely a pre-arrival cleanup of fund holdings, pension structures, and currency exposurethat the US system handles on its own terms.
Tom Pewtress works with European families moving to the US to coordinate fund, pension, and reporting issues across both jurisdictions.
Ordered list
Unordered list
Ordered list
Unordered list
In a private introductory session, Tom canhelp you:
Copyright © 2021. Skybound Wealth Management USA, LLC. All rights reserved. Skybound Wealth Management USA, LLC is registered with the SEC: CRD 313358. SEC No. 801-121157.
Check the background of this firm on the Investment Adviser Public Disclosure page.
