In short
- If your accounts outside the U.S. add up to more than $10,000 at any moment in the year, you file an FBAR. The total includes balances you cannot withdraw yet, which is why most preparers include the AFP.
- Form 8938 (FATCA) is a separate requirement with higher thresholds. Living abroad, a single filer reports above $200,000 at year end or $300,000 at any time.
- Fondos mutuos, including those held inside an APV, are usually PFICs and need Form 8621 each year.
- Both forms are information returns. A complete, on-time filing usually costs nothing in tax.
The usual accounts in Chile
| Account | What it is | Usual U.S. reporting |
|---|---|---|
| AFP (cuenta obligatoria) | Mandatory pension savings, at least 10% of taxable salary, invested in the A to E funds | FBAR (most preparers include it); Form 8938 above the thresholds |
| Cuenta 2 at the AFP | Voluntary savings you can withdraw | FBAR; Form 8938 above the thresholds |
| APV | Voluntary pension savings at an AFP, bank, insurer or fund manager | FBAR; Form 8938; Form 8621 if invested in fondos mutuos |
| Bank accounts, CuentaRUT, cuenta vista | Everyday accounts | FBAR; Form 8938 above the thresholds |
| Fondos mutuos, ETFs, corredora account | Investments | FBAR; Form 8938; Form 8621 per fund |
The FBAR: $10,000 is a low bar
The FBAR (FinCEN Form 114) is filed online with FinCEN, separately from your tax return. You file it if the combined value of all your foreign financial accounts exceeded $10,000 at any time during the calendar year. Once you cross that line, every account is listed, including the small ones.
For each account you report the highest balance during the year, converted to dollars at the Treasury year-end exchange rate. The FBAR is due April 15 with an automatic extension to October 15.
You also report accounts where you only have signing authority, such as your SpA's business account.
Is the AFP a "foreign financial account"?
The IRS and FinCEN have not issued guidance written specifically for Chilean AFPs. An AFP is an individual account in your name, invested in funds and administered by a financial institution, and that is why most U.S. preparers treat it as reportable on the FBAR. We take the same view: listing the AFP costs nothing, while leaving it out can be questioned later.
On Form 8938 the answer is clearer. The instructions treat an interest in a foreign pension plan or deferred compensation plan as a specified foreign financial asset, so the AFP counts once you are above the thresholds.
Form 8938, the FATCA form
Form 8938 goes with your Form 1040. Living abroad, you file it when your specified foreign financial assets exceed:
- Single or married filing separately: $200,000 on the last day of the year, or $300,000 at any time.
- Married filing jointly: $400,000 on the last day of the year, or $600,000 at any time.
The penalty for not filing is up to $10,000, plus more after an IRS notice. Many people file both forms with largely the same information.
APV, cuenta 2 and fondos mutuos: the PFIC question
Chilean mutual funds, and most investment funds outside the U.S., are generally passive foreign investment companies (PFICs) for U.S. purposes. Each fund needs its own Form 8621 every year, and gains can be taxed at the highest rate plus an interest charge unless an election is made.
This often surprises people with an APV at a bank or fund manager, because the APV itself feels like a pension. What matters is what it holds. APV régimen A or B invested in fondos mutuos usually means PFIC reporting. The AFP's own A to E funds are usually analyzed as part of the pension plan rather than as funds you own directly, but voluntary money held there is worth reviewing case by case.
Before you open a new APV or investment account, a short conversation about where to hold it can save years of Form 8621 work. See Form 8621 and Chilean fondos mutuos.
Reporting is not the same as tax
The FBAR and Form 8938 do not create tax by themselves. Your salary contributions to the AFP, and the growth inside it, raise separate questions about U.S. income tax, and the answer can depend on the type of contribution and on the U.S.–Chile tax treaty in force since December 2023. When you retire and draw your pension in Chile, Chilean tax paid on it can usually be credited against the U.S. tax on the same income.
If you never reported your AFP
This is very common, and fixable. If you filed your U.S. returns and reported all income but missed the FBARs, the IRS delinquent FBAR submission procedures may let you file them without penalty, with a statement explaining why. If returns are also missing, the Streamlined procedures are usually the route. See our guide to catching up on U.S. filings.
General information, not individual U.S. or Chilean tax advice. Rules, thresholds and deadlines change; confirm them for your situation. Chile US Tax is an independent practice, not a government office.