Foreign Pensions and Retirement Accounts: What U.S. Taxpayers Must Report

The short answer

A pension or retirement account in Taiwan or another country can trigger three separate U.S. reporting questions — Form 8938, the FBAR, and Forms 3520 and 3520-A — plus a separate question about U.S. income tax. Each has its own rules, and the answer can differ by plan. This guide explains what U.S. rules confirm, which questions depend on the specific plan, and where the treatment of Taiwan plans remains unresolved.

Confirmed rules, plan-specific questions, and open issues

Form 8938

• What to report: if you are required to file Form 8938, report your interest in a foreign pension plan or foreign deferred compensation plan in Part VI. Do not separately report the assets the plan holds.
• Value: generally the fair market value of your beneficial interest at year end. If you do not know it and cannot readily find it, the instructions use the value of cash and property distributed to you during the year.
• Not reportable: U.S. social security, social insurance benefits, or similar programs of a foreign government. The instructions add that this does not include an interest in a foreign pension plan.
• Penalties: a $10,000 penalty for failing to file a required Form 8938, and a 40% penalty on an underpayment related to an undisclosed asset — the instructions' examples include a foreign pension distribution left off the return.
• Thresholds: see FBAR vs. Form 8938.

FBAR

The IRS FBAR page lists an exception for accounts held in an IRA or in a retirement plan of which you are a participant or beneficiary. The Internal Revenue Manual (IRM 4.26.16.3.3) explains that this exception is for participants in U.S. tax-qualified retirement plans and IRAs, and cautions: "This exception is for U.S. plans only. Foreign plans, such as a Canadian Registered Retirement Savings Plan (RRSP) and accounts managed by Mexico's Administrators of Retirement Funds (AFORES), are normally reportable on an FBAR."

That does not answer whether a particular Taiwan arrangement must be reported. The FBAR applies to foreign financial accounts in which you have a financial interest or signature authority. The IRM (4.26.16.2.2) describes reportable financial accounts as bank accounts, securities accounts, and "other financial accounts" such as an insurance or annuity policy with a cash value or a publicly available pooled fund. Its list of accounts that are not reportable refers to accounts of U.S. federal, state, tribal, and territorial governments and their instrumentalities — so do not assume a foreign government–run arrangement is excluded for that reason. Whether a given plan is a financial account, and whether you have a financial interest in it, depends on how it is structured and held. FinCEN's regulations could not be accessed for this guide, so check FinCEN's guidance or get professional advice for your plan.

Forms 3520 and 3520-A and Rev. Proc. 2020-17

Some foreign retirement arrangements are foreign trusts for U.S. tax purposes, which can require Form 3520 and Form 3520-A. Rev. Proc. 2020-17 exempts eligible individuals — generally U.S. citizens and residents who are compliant with their U.S. filing and income-reporting obligations for the plan — from these forms for a tax-favored foreign retirement trust that meets all of these conditions under the laws of its country:

• it is generally exempt from income tax or otherwise tax-favored;
• annual information reporting is provided or available to that country's tax authorities;
• only contributions from income earned by performing personal services are permitted;
• contributions are limited — by a percentage of earned income, to $50,000 or less a year, or to $1,000,000 or less over a lifetime;
• withdrawals are conditioned on reaching retirement age, disability, or death, or penalties apply to earlier withdrawals; and
• for employer-maintained plans, the plan meets nondiscrimination requirements.

The Form 3520 instructions (Rev. December 2025) also describe separate exceptions for certain Canadian plans and allow reliance on proposed regulations for certain tax-favored foreign trusts. Rev. Proc. 2020-17 does not change FBAR or Form 8938 obligations. Do not assume a Taiwan plan meets these conditions.

Foreign social security and employer plans

• Government social insurance programs: not reportable on Form 8938, as noted above. Their benefits are also not foreign earned income for the foreign earned income exclusion.
• Employer-sponsored foreign plans: generally reportable on Form 8938 as an interest in a foreign pension plan if you must file; FBAR and Form 3520 treatment depends on the plan.

Taiwan examples: questions to answer

Readers often ask about the following Taiwan arrangements. This guide does not classify them; these are the questions to resolve for each one with the plan documents and a professional.

U.S. income tax issues

As a U.S. citizen or resident, you report worldwide income. The U.S. may tax contributions, investment growth, or distributions of a foreign plan differently from the other country. Taiwan is not on the IRS list of U.S. income tax treaties, and we found no IRS guidance specific to Taiwan plans. Foreign income tax paid on distributions may support a foreign tax credit. Because the answer depends on the plan, get professional advice before you file.

Common mistakes

• Assuming the IRA exception covers foreign plans for the FBAR.
• Assuming every foreign plan qualifies under Rev. Proc. 2020-17.
• Leaving a foreign pension off Form 8938 when you are required to file.
• Treating reporting and taxation as the same question.