Germany

In a direct insurance, the employer takes out a life or pension insurance policy for you, with you and your surviving relatives as the beneficiaries.¹ It is one of the routes German law allows for an occupational pension, and the employer stays liable for the promised benefits whichever route it uses.^2,3

The employer may pay, or you may pay by salary conversion: you give up part of your future gross salary, and the employer uses it to buy a pension entitlement of equal value.⁴ Employees compulsorily insured in the statutory pension insurance have a right to this,^5,6 unless their pay rests on a collective agreement that does not allow it,⁷ up to 4% of the contribution ceiling of the statutory pension insurance, and where it saves your employer social security contributions, the employer must generally add 15%.⁸ Under salary conversion you must hold an irrevocable right to the benefits from the start.⁹

Not a trust: a life or pension insurance policy the employer takes out with an insurer.

Not a trust. An insurance contract is an insurer's promise to pay when the insured event occurs,¹⁰ and a trust for U.S. purposes needs trustees who take title to property to protect or conserve it for the beneficiaries,¹¹ which a contract does not create. No IRS guidance addresses German direct insurance.

Applies only to a trust; employer premiums for an annuity contract are §403(c) income the earned income exclusion can't cover.

§402(b) reaches only an employer's contributions to an employees' trust,¹² so it doesn't apply to a contract. An employer's premiums for an annuity contract are your income under the rules for property transferred for services;¹³ no IRS guidance says whether a direct insurance is an annuity contract. If it is instead a contract providing life insurance protection, its cash value and other rights, apart from current life protection, count as property under the same rules, so the result is much the same.¹⁴ The foreign earned income exclusion cannot cover amounts included under §403(c).¹⁵ Salary conversion is your own pay: an amount paid in at your election is yours.^16,17

Not needed for a contract.

Not needed: §6048 reaches only foreign trusts.¹⁸

Article 18A(5) can keep contributions out of U.S. income for a U.S. citizen living and working in Germany.

Article 18A(5) of the U.S.-Germany treaty protects a U.S. citizen who lives in Germany and works there for a German employer. Contributions to a German pension plan from that work, yours and your employer's, and benefits accrued during it, stay out of U.S. income,¹⁹ as far as they get German tax relief and no further than a generally corresponding U.S. plan would allow.^20,21 For the parallel relief in Article 18A(2), Treasury names the §402(g) limit on elective contributions.²² The treaty's protocol recognizes arrangements under section 1 of the Betriebsrentengesetz as corresponding to U.S. plans, and Treasury says Article 18A(5) applies to them,^23,24 so this route qualifies.² German relief here covers employer contributions and salary conversion together, up to 8% of the contribution ceiling and from the first employment only,^25,4 and not where you chose Riester treatment.²⁶ Amounts relieved count when working out what your own U.S. plans and IRAs allow,²⁷ and they give you no basis, so they are taxed when paid out.²⁸

For a U.S. resident who belongs to a German plan, Article 18A(1) taxes the plan's income only when it is paid out.^29,30 The saving clause lets the U.S. tax its citizens and residents as if the treaty did not apply, but it spares Article 18A(1) and (5).^31,32,33 On our reading, a U.S. citizen living in Germany is a resident of Germany for this rule, as the protocol says Germany treats them,³⁴ so Article 18A(1) doesn't reach them, and Article 18A(5) covers only the years of that employment. But Treasury says the United States will allow its citizens and residents the benefits of Article 18A(1) and (5),³⁵ so that is not settled. Someone working in the U.S. who is neither a U.S. citizen nor a green card holder, with contributions to the plan before that work began, can get similar relief under Article 18A(2) and (3).^36,37

Payouts: a private pension, a lump sum included, is taxable only in the country where you live,^38,39 but that rule is subject to the saving clause, so the U.S. still taxes its citizens and residents,⁴⁰ with a credit for German tax under Article 23.⁴¹ Disclosing a treaty position on Form 8833 is waived for pensions and pay,⁴² but the deferral under Article 18A(1) is not clearly within that waiver; the cautious reading is to disclose it unless the amounts are $10,000 or less in the year.⁴³

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^18,44,45 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

A Pensionskasse is a legally independent life insurance undertaking,⁴⁸ supervised by BaFin, the German financial regulator,⁴⁹ that gives the insured person their own claim against it, or instead insures the employer's obligation, with no direct claim for you.⁵⁰ The employer pays, or you pay by salary conversion, as for direct insurance.⁴ German law lets it take the form of a stock company, a European Company or a mutual, among others.⁵¹ A stock company's name must say so, in full or in a generally understandable abbreviation, such as AG.⁵² This block covers the stock forms.

Not a trust, on our reading: a corporation under the U.S. entity rules, and an insurer. No IRS guidance addresses it.

Not a trust, on our reading, and no IRS guidance addresses German Pensionskassen. A German Aktiengesellschaft and a European Company are on the list of foreign entities always treated as corporations,^53,54 and the Code's corporations include insurance companies;⁵⁵ for life insurance companies, the Code's test is whether more than half of the business is issuing insurance or annuity contracts.⁵⁶ Those rules apply to an entity that isn't properly a trust, so the trust question comes first.^57,58 But a trust's beneficiaries are not associates in a business for profit,⁵⁹ and a stock company that provides insurance is a business whose capital is divided into shares.⁶⁰ The Fifth Circuit, classifying a Liechtenstein Stiftung as a trust, contrasted the Aktiengesellschaften on that kind of list.⁶¹

Applies only to a trust; employer money for an annuity contract is §403(c) income the earned income exclusion can't cover.

§402(b) reaches only an employer's contributions to an employees' trust,¹² so on our reading it doesn't apply. An employer's premiums for an annuity contract are your income under the rules for property transferred for services;¹³ no IRS guidance says whether a Pensionskasse's promise is an annuity contract. The foreign earned income exclusion cannot cover amounts included under §403(c).¹⁵ Salary conversion is your own pay.^16,17

Not needed for a contract with a company.

Not needed: §6048 reaches only foreign trusts.¹⁸

The same Article 18A and Article 18 rules as for direct insurance.

The same as for direct insurance: Article 18A(5) can keep contributions out of U.S. income for a U.S. citizen living and working in Germany, as far as they get German relief,^19,20,25 Article 18A(1) defers income for a U.S. resident,²⁹ including on a move to another German plan, since it stops at income "not transferred to another pension plan" there; it covers the plan's income, not contributions, and whether it reaches a U.S. citizen living in Germany is not settled.⁶² Payouts fall under Article 18, subject to the saving clause.^38,40

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^18,44,45 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

A Pensionskasse is a legally independent life insurance undertaking,⁴⁸ supervised by BaFin,⁴⁹ that gives the insured person their own claim against it, or instead insures the employer's obligation, with no direct claim for you.⁵⁰ A mutual is a society set up to insure its members on the mutual principle,⁶³ only someone it insures can be a member,⁶⁴ and its name must show that it is a mutual.⁶⁵ The employer pays, or you pay by salary conversion: you give up part of your future gross salary for a pension entitlement of equal value.⁴ Where that saves your employer social security contributions, the employer must generally add 15%.⁸

Not settled: a licensed insurer, yet a private ruling held a pension body a trust. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses German Pensionskassen. The argument that it is a trust: an arrangement's nature, purpose and operations matter most, and its legal form is evidence but not decisive, as the Fifth Circuit said of a Liechtenstein Stiftung,^66,67 and in a private ruling the IRS held a foreign pension entity to be a trust although its purpose was to insure the pensions of covered employees, its regulator also supervised insurers, and its benefits followed a formula.^68,69 On our reading, a company or industry Pensionskasse has the same retirement purpose, and a regulated mutual's articles may allow pension claims to be reduced, so its promise is not a fixed guarantee.⁷⁰

The argument that it is not: the Code treats insurance companies as corporations and their members as shareholders,^55,71,56 and a foreign entity whose members all have limited liability is a corporation by default.⁷² German law makes a Pensionskasse a life insurer, and a mutual has legal capacity of its own and owes its members contract benefits.^48,63,50 A trust's beneficiaries cannot share in the responsibility for the property,⁵⁹ but only insured persons can be a mutual's members, and in a regulated mutual at least half of the senior body should be insured persons or their representatives.^64,73 The statutory "trustee" only monitors the assets that back the insurance,⁷⁴ and the insured rank first on insolvency rather than holding title.⁷⁵ Chief Counsel advice on Liechtenstein entities, which is not precedent, turns on primary purpose and notes that a Stiftung has no members or board.^76,77

With the question open and the penalty for a missing Form 3520-A large,⁷⁸ this guide takes the cautious course of reading a mutual Pensionskasse as a trust. Governed by German law and run in Germany, it would meet neither test for a domestic trust, so it would be foreign.^79,80

On the cautious reading, a §402(b) employees' trust; salary conversion is your own money.

No IRS ruling addresses German Pensionskassen, though the IRS has ruled privately that a foreign fund with mandatory employer contributions and personal accounts is a §402(b) trust.⁸¹ On the cautious reading this is a §402(b) employees' trust: an employer pays in for its employees, and a trust created outside the United States cannot be exempt under U.S. §501(a).⁸² §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁸³ and on our reading nothing suggests this plan meets §401(a).

On that reading, employer contributions are U.S. income to you in the year they are paid, to the extent they are vested,^12,84 and the foreign earned income exclusion cannot cover them.⁸⁵ If your interest vests later, the value of your interest from the employer's contributions becomes income in that year.⁸⁶ You are not treated as owner of the part they fund.⁸⁷ German law keeps an employer-funded entitlement once you are past 21 and the promise has run three years,⁸⁸ and one funded by salary conversion from the start.⁸⁹ Salary conversion is your own money: you can demand it,⁹⁰ and an amount contributed at an employee's election is the employee's.^16,17 So are contributions you pay from your wages.⁹¹ A collective or works agreement can make conversion automatic, with a right to refuse,⁹² and we read that as your election too; the U.S. rules for §401(k) plans, which do not govern a foreign plan, point the same way.⁹³

Once your own contributions have come to exceed your employer's, you are treated as owner of the part your contributions fund, if the grantor trust rules are otherwise met.⁹⁴ §679 does not apply to a §402(b) trust,⁹⁵ so that means §677 or a similar section.⁹⁶ In a pooled plan, where income may not be held for you alone, whether they are met is not settled, and this guide keeps the cautious course. Where salary conversion with the 15% top-up is the only funding, that is from your first contribution;⁸ if your employer has always paid more than you, it has not happened. Where the plan promises a defined benefit and the employer's contribution for you is not known, the regulations work it out by actuarial methods,⁹⁷ so the answer depends on the plan. No contribution to a §402(b) trust is a Part I event, your own included.⁹⁸ Payouts from the employer's part are taxed under §72 when they are paid or made available to you,^99,100 and they stay off Part III if you report them as compensation income,^101,102 unlike payouts from a part you own.¹⁰³

If you are a highly compensated employee and one reason the plan is not exempt is that it fails the U.S. coverage tests, you include your vested balance, less what has already been taxed to you, in income each year instead.¹⁰⁴

Rev. Proc. 2020-17: possible, with conditions open. Proposed regulations: possible, with a value test.

Rev. Proc. 2020-17 exempts an eligible individual (one who has filed U.S. returns and reported the plan's income as U.S. law requires)¹⁰⁵ from Forms 3520 and 3520-A for a retirement trust that meets its conditions.¹⁰⁶ A Pensionskasse points toward four of them. It is tax-favored: employer contributions are tax-free up to 8% of the contribution ceiling.^25,107 It must report its pension payments to the central office named in the income tax act, which we read as meeting the yearly reporting condition.^108,109 Contributions come from pay,^4,110 though you may continue with your own money after you leave or while unpaid,^111,112 which we read as not defeating the condition; that is not settled. And benefits generally start only when earned income ends or a full statutory pension starts, while cash-outs are restricted.^113,114,115

Two are open. Rev. Proc. 2020-17 wants contributions limited by a percentage of earned income or a dollar cap,¹¹⁶ but Germany limits the tax relief, not the contributions, and the 8% is of a national ceiling, not of your earnings.²⁵ And an employer plan must cover a wide range of employees,¹¹⁷ while German law leaves the employer free to decide which groups get employer money,¹¹⁸ though salary conversion is open to employees in the statutory pension insurance.⁶ That one turns on the plan. With no IRS guidance on German plans, whether Rev. Proc. 2020-17 covers them is not settled.

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹¹⁹ let a value test stand in for a contribution limit. They test "the aggregate value of the trust(s) in the trust's jurisdiction", at or under US$600,000 at every point in the year (adjusted for inflation from 2026).¹²⁰ On our reading that adds together all your trusts in Germany, but a pooled fund read as one trust may fail on that wording. The employer condition stays.¹²¹

Article 18A defers U.S. tax on the part you own and can exclude contributions, but not this reporting.

Article 18A(5) can keep contributions, yours and your employer's, and accrued benefits out of U.S. income for a U.S. citizen living in Germany and working there for a German employer, as far as they get German relief and no further than a corresponding U.S. plan would allow.^19,20,21,25 The treaty's protocol recognizes this route as corresponding.^23,24 Contributions kept out of income give you no basis.²⁸

For a U.S. resident, Article 18A(1) taxes the plan's income only when it is paid out, and the saving clause spares it.^29,32 On our reading, for a §402(b) trust that defers the yearly income of the part you own, not the employer's contributions, which are your pay rather than the plan's income.¹² A U.S. citizen living in Germany is a resident of Germany for this rule, on our reading,³⁴ so Article 18A(1) doesn't reach them, though Treasury's words point the other way, so that is not settled.³⁵ Payouts fall under Article 18, subject to the saving clause.^38,40 Disclosing a treaty position on Form 8833 is waived for pensions and pay,⁴² but the Article 18A(1) deferral is not clearly within that waiver; the cautious reading is to disclose it unless the amounts are $10,000 or less in the year.⁴³ The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

Part II and Form 3520-A each year for the part your own money funds, once yours exceed your employer's.

Read as a §402(b) trust: no Part I for any contribution.⁹⁸ No Part II or Form 3520-A for the employer-funded part; once your own contributions, salary conversion included, exceed your employer's, Part II and Form 3520-A each year for the part they fund.^87,94,44 No Part III for payouts from the employer-funded part that you report as compensation income;¹⁰¹ payouts from a part you own go on Part III, lines 24 and 27.¹⁰³ No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year, or when paid out under the treaty.^{99,123,124,29} If the provider does not file Form 3520-A, you attach a substitute to your Form 3520.¹²⁵

If a mutual Pensionskasse is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁸ Either way, an eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them.^106,119 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

A Pensionsfonds is a scheme with legal personality that provides funded occupational pensions for one or more employers,¹²⁶ and gives employees their own claim against it.¹²⁷ Unlike a Pensionskasse, it is not organized as an insurance company,¹²⁸ and it may not guarantee every benefit the way an insurance contract does.¹²⁹ It can only be a stock company or a mutual Pensionsfonds.¹³⁰ The employer pays, or you pay by salary conversion,⁴ and the 15% top-up applies as for a Pensionskasse.^8,131

Not settled: a company, but not an insurer by statute. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses German Pensionsfonds. The argument that it is a trust: an arrangement's nature, purpose and operations matter most, and its legal form is evidence but not decisive, as the Fifth Circuit said of a Liechtenstein Stiftung,^66,67 and the IRS has ruled privately that a foreign pension entity is a trust.⁶⁸ A Pensionsfonds does not write insurance, so the Code's treatment of insurance companies as corporations doesn't clearly reach it,^128,129,55 and it runs under pension plans rather than insurance policies.¹³²

The argument that it is not: a German Aktiengesellschaft is on the list of foreign entities always treated as corporations,⁵³ though that list applies only to an entity that isn't properly a trust,⁵⁷ and a mutual Pensionsfonds follows the rules for mutuals.¹³⁰ Either way you hold a claim against a company,¹²⁷ not an interest under a trustee.¹¹

With the question open and the penalty for a missing Form 3520-A large,⁷⁸ this guide takes the cautious course of reading a Pensionsfonds as a trust, in either form. Governed by German law and run in Germany, it would meet neither test for a domestic trust, so it would be foreign.^79,80

On the cautious reading, a §402(b) employees' trust; salary conversion is your own money.

As for a mutual Pensionskasse. No IRS ruling addresses it. On the cautious reading it is a §402(b) employees' trust: an employer pays in for its employees, and a trust created outside the United States cannot be exempt under U.S. §501(a).⁸² §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁸³ and on our reading nothing suggests this plan meets §401(a). Employer contributions are U.S. income to you when paid, to the extent vested, and the value of an interest that vests later is income in that year,^12,84,86 and the foreign earned income exclusion cannot cover them.⁸⁵ You are not owner of the part they fund.⁸⁷

Salary conversion is your own money,^90,16,17 and once your own contributions exceed your employer's you are treated as owner of the part they fund, if the grantor trust rules are otherwise met.⁹⁴ In a pooled plan, whether they are met is not settled, and this guide keeps the cautious course.⁹⁶ Where salary conversion with the 15% top-up is the only funding, that is from your first contribution.⁸ No contribution to a §402(b) trust is a Part I event.⁹⁸ Payouts from the employer's part are taxed under §72,⁹⁹ and they stay off Part III if you report them as compensation income,¹⁰¹ unlike payouts from a part you own.¹⁰³ The highly compensated employee rule can apply.¹⁰⁴

As for a mutual Pensionskasse: Rev. Proc. 2020-17 possible, conditions open; proposed regulations possible.

As for a mutual Pensionskasse. Rev. Proc. 2020-17 exempts an eligible individual¹⁰⁵ for a retirement trust that meets its conditions.¹⁰⁶ A Pensionsfonds points toward the first three and the payout condition: contributions are tax-free up to 8% of the contribution ceiling,^25,107 it must report pension payments to the central office named in the income tax act,^108,109 contributions come from pay, with the same point on continuing with your own money,^111,110 and benefits are retirement benefits paid for life, as a lump sum, or in installments, with cash-outs restricted.^133,114,115 The contribution limit is open, and the employer condition turns on the plan.^116,117,118 So whether it covers a Pensionsfonds is not settled.

Under the proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹¹⁹ a value test can stand in for a contribution limit. It tests "the aggregate value of the trust(s) in the trust's jurisdiction", at or under US$600,000 at every point in the year (adjusted for inflation from 2026).¹²⁰ On our reading that adds together all your trusts in Germany, but a pooled fund read as one trust may fail on that wording. The employer condition stays.¹²¹

As for a mutual Pensionskasse: Article 18A can defer and exclude, but not remove this reporting.

As for a mutual Pensionskasse. Article 18A(5) can keep contributions and accrued benefits out of U.S. income for a U.S. citizen living and working in Germany, as far as they get German relief,^19,20,25 and the protocol recognizes this route.²³ Article 18A(1) defers the plan's income for a U.S. resident, including on a move to another German plan, though it covers the plan's income, not contributions.^29,32,62 Payouts fall under Article 18, subject to the saving clause.^38,40 Form 8833: the cautious reading is to disclose an Article 18A(1) deferral unless the amounts are $10,000 or less in the year.^42,43 The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

Part II and Form 3520-A each year for the part your own money funds, once yours exceed your employer's.

Read as a §402(b) trust: no Part I for any contribution.⁹⁸ No Part II or Form 3520-A for the employer-funded part; once your own contributions, salary conversion included, exceed your employer's, Part II and Form 3520-A each year for the part they fund.^87,94,44 No Part III for payouts from the employer-funded part that you report as compensation income;¹⁰¹ payouts from a part you own go on Part III, lines 24 and 27.¹⁰³ No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year, or when paid out under the treaty.^{99,123,124,29} If the provider does not file Form 3520-A, you attach a substitute to your Form 3520.¹²⁵

If a Pensionsfonds is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁸ Either way, an eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them.^106,119 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

Under a pure contribution plan, a collective agreement obliges the employer to pay contributions to a Pensionsfonds, a Pensionskasse or a direct insurance.¹³⁴ There are no guaranteed benefits, and the employer's own liability for them falls away;¹³⁵ the provider may take on no obligation to guarantee them,¹³⁶ and the money is kept in segregated assets or a segregated portfolio.¹³⁷ Salary conversion may be part of the funding, as on other routes.⁴

Not settled at any provider: no guaranteed benefits, kept in a separate pool. Cautious: a foreign trust.

Not settled at any provider, and no IRS guidance addresses these plans. The argument that it is a trust: the plan pays only what a separate pool of assets earns, with no guarantee from the provider or the employer,^135,136,137 which is closer to property held for members than to insurance, and the IRS has ruled privately that a foreign pension entity is a trust.⁶⁸

The argument that it is not: the plan is run by a Pensionsfonds, a Pensionskasse or a life insurer,¹³⁸ one in stock form is a corporation under the U.S. entity rules,^53,55 and you hold a claim, not an interest under a trustee.¹¹

With the question open and the penalty for a missing Form 3520-A large,⁷⁸ this guide takes the cautious course of reading it as a trust, whichever provider runs it. Governed by German law and run in Germany, it would meet neither test for a domestic trust, so it would be foreign.^79,80

On the cautious reading, a §402(b) employees' trust; salary conversion is your own money.

As for a mutual Pensionskasse, except on vesting. On the cautious reading it is a §402(b) employees' trust: an employer pays in for its employees, and a trust created outside the United States cannot be exempt under U.S. §501(a).⁸² §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁸³ and on our reading nothing suggests this plan meets §401(a). Employer contributions are U.S. income to you when paid, to the extent vested,^12,84 and here the entitlement from contributions paid vests at once,¹³⁹ because the age and service rule on other routes does not apply.¹⁴⁰ The foreign earned income exclusion cannot cover them.⁸⁵ You are not owner of the part they fund.⁸⁷

Salary conversion is your own money,^16,17 and once your own contributions exceed your employer's you are treated as owner of the part they fund, if the grantor trust rules are otherwise met.⁹⁴ In a pooled plan, whether they are met is not settled, and this guide keeps the cautious course.⁹⁶ No contribution to a §402(b) trust is a Part I event.⁹⁸ Payouts from the employer's part are taxed under §72,⁹⁹ and they stay off Part III if you report them as compensation income,¹⁰¹ unlike payouts from a part you own.¹⁰³ The highly compensated employee rule can apply.¹⁰⁴

As for a mutual Pensionskasse: Rev. Proc. 2020-17 possible, conditions open; proposed regulations possible.

As for a mutual Pensionskasse. Rev. Proc. 2020-17 exempts an eligible individual¹⁰⁵ for a retirement trust that meets its conditions.¹⁰⁶ These plans point toward the same ones: tax-free employer contributions,^25,107 reports of pension payments to the central office,^108,109 contributions from pay, with the same point on continuing with your own money,^141,110 and retirement payouts, with early use barred and cash-outs limited to a threshold the collective parties set.^142,115 The contribution limit is open, and the employer condition turns on the plan.^116,117 So whether it covers them is not settled.

Under the proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹¹⁹ a value test can stand in for a contribution limit. It tests "the aggregate value of the trust(s) in the trust's jurisdiction", at or under US$600,000 at every point in the year (adjusted for inflation from 2026).¹²⁰ On our reading that adds together all your trusts in Germany, but a pooled fund read as one trust may fail on that wording. The employer condition stays.¹²¹

As for a mutual Pensionskasse: Article 18A can defer and exclude, but not remove this reporting.

As for a mutual Pensionskasse. A pure contribution plan is an arrangement under section 1 of the Betriebsrentengesetz,¹³⁴ so Article 18A(5) can keep contributions and accrued benefits out of U.S. income for a U.S. citizen living and working in Germany, as far as they get German relief,^19,20,23,25 and Article 18A(1) defers the plan's income for a U.S. resident, including on a move to another German plan, though it covers the plan's income, not contributions.^29,32,62 Payouts fall under Article 18, subject to the saving clause.^38,40 Form 8833: the cautious reading is to disclose an Article 18A(1) deferral unless the amounts are $10,000 or less in the year.^42,43 The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

Part II and Form 3520-A each year for the part your own money funds, once yours exceed your employer's.

Read as a §402(b) trust: no Part I for any contribution.⁹⁸ No Part II or Form 3520-A for the employer-funded part; once your own contributions, salary conversion included, exceed your employer's, Part II and Form 3520-A each year for the part they fund.^87,94,44 No Part III for payouts from the employer-funded part that you report as compensation income;¹⁰¹ payouts from a part you own go on Part III, lines 24 and 27.¹⁰³ No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year, or when paid out under the treaty.^{99,123,124,29} If the provider does not file Form 3520-A, you attach a substitute to your Form 3520.¹²⁵

If the plan is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁸ Either way, an eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them.^106,119 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

A support fund is an independent pension scheme, not an insurance company, and BaFin does not supervise it.¹⁴³ You have no direct claim against it, only against your employer, which uses it to meet its pension obligations, and as a rule it pays the benefits to you.¹⁴³ German law describes it as a pension institution with legal personality that grants no legal right to its benefits.¹⁴⁴ The employer pays and can deduct what it pays within limits,¹⁴⁵ and salary conversion can run through it, without the 15% top-up.^4,131

Not settled: a separate legal person, with no insurance business and no legal claim for you. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses German support funds. The argument that it is a trust: an arrangement's nature, purpose and operations matter most, and its legal form is evidence but not decisive, as the Fifth Circuit said of a Liechtenstein Stiftung,^66,67 and the IRS has ruled privately that a foreign pension entity is a trust.⁶⁸ A support fund runs no insurance business and exists to hold money for pensions.¹⁴³

The argument that it is not: it is a legal person of its own,¹⁴⁴ and a foreign entity whose members all have limited liability is a corporation by default.⁷² You have no claim against it,¹⁴³ so it looks more like a tool of the employer than property held for you.¹¹

With the question open and the penalty for a missing Form 3520-A large,⁷⁸ this guide takes the cautious course of reading a support fund as a trust. Governed by German law and run in Germany, it would meet neither test for a domestic trust, so it would be foreign.^79,80

On the cautious reading, a §402(b) employees' trust; when your interest vests is not settled.

On the cautious reading it is a §402(b) employees' trust: an employer pays in for its employees, and a trust created outside the United States cannot be exempt under U.S. §501(a).⁸² §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁸³ and on our reading nothing suggests this plan meets §401(a). Employer contributions are U.S. income to you when paid, to the extent your interest is vested, and the value of an interest that vests later is income in that year,^12,84,86 and the foreign earned income exclusion cannot cover them.⁸⁵ You are not owner of the part they fund.⁸⁷ No IRS guidance says when an interest vests if you have no claim against the fund. The cautious reading follows German law, which keeps the entitlement once you are past 21 and the promise has run three years, treating a leaver like a stayer,^88,144 and at once for salary conversion.⁸⁹

Salary conversion is your own money.^16,17 Once it exceeds your employer's contributions, you are treated as owner of the part it funds, if the grantor trust rules are otherwise met,⁹⁴ and where it is the only funding, that is from the start. In a pooled fund, whether they are met is not settled, and this guide keeps the cautious course.⁹⁶ No contribution to a §402(b) trust is a Part I event.⁹⁸ Payouts from the employer's part are taxed under §72,⁹⁹ and they stay off Part III if you report them as compensation income,^101,102 unlike payouts from a part you own.¹⁰³ The highly compensated employee rule can apply.¹⁰⁴

Don't assume one: yearly reporting and a contribution limit aren't shown, and the employer condition turns on the plan.

Don't assume an exemption. Rev. Proc. 2020-17 covers a retirement trust that meets all its conditions, for an eligible individual.^106,105 A support fund meets some: the employer deducts what it pays,^145,107 the money follows employment,¹¹⁰ and cash-outs are restricted.^114,115 But Germany's pension reports name Pensionskassen, Pensionsfonds and insurers, not support funds.^108,109 An employer's yearly wage report to the tax office covers pay,¹⁴⁶ which may reach payouts run through payroll, but we could not confirm that it reaches a support fund's payouts or counts for this condition. We found no limit on contributions other than on the deduction,^145,116 and the employer condition turns on the plan.^117,118

The proposed regulations let a value test stand in for a contribution limit,^120,119 but they keep the reporting and employer conditions.^147,121

Article 18A(5) reaches this route, but only as far as German relief exists, which is not settled.

A support fund is one of the routes under section 1 of the Betriebsrentengesetz,² which the protocol recognizes,²³ so Article 18A(5) reaches it for a U.S. citizen living and working in Germany. But it applies only as far as the contributions or benefits qualify for German tax relief,²⁰ and the 8% rule names only the Pensionsfonds, Pensionskasse and direct insurance.²⁵ German income tax counts only payments to a Pensionsfonds, a Pensionskasse or a direct insurance as current pay,¹⁴⁸ so on this route you are taxed when you are paid. On our reading that may be the relief the article means, but no IRS guidance says what relief counts here, and in the mirror case of U.S. plans the protocol names section 3 no. 63 as the relief Germany gives.¹⁴⁹ That is not settled.

Article 18A(1) defers the income of the part you own for a U.S. resident,^29,32 and payouts fall under Article 18, subject to the saving clause.^38,40 Form 8833: the cautious reading is to disclose an Article 18A(1) deferral unless the amounts are $10,000 or less in the year.^42,43 The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

Part II and Form 3520-A each year for the part salary conversion funds, once it exceeds the employer's.

Read as a §402(b) trust: no Part I for any contribution.⁹⁸ No Part II or Form 3520-A for the employer-funded part; once your salary conversion exceeds your employer's contributions, Part II and Form 3520-A each year for the part it funds.^87,94,44 No Part III for payouts from the employer-funded part that you report as compensation income;¹⁰¹ payouts from a part you own go on Part III, lines 24 and 27.¹⁰³ No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year, or when paid out under the treaty.^{99,123,124,29} If the fund does not file Form 3520-A, you attach a substitute to your Form 3520.¹²⁵

If a support fund is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁸ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

A direct commitment is the employer's own promise, with no pension provider involved, and you have a legal right to the promised benefits.¹⁵⁰ The employer pays for it, and it can book a reserve for it on its balance sheet.¹⁵¹ Salary conversion can fund one by agreement.¹⁵²

Not a trust: a direct promise by the employer, with no provider and no assets held for you.

Not a trust. Trustees taking title to property are what make an arrangement a trust for U.S. purposes,¹¹ and here nothing is set aside or held by anyone.¹⁵⁰

Does not apply: nothing is paid to a trust.

§402(b) reaches an employer's contributions to an employees' trust,¹² and nothing is paid to a trust here. An unfunded and unsecured promise to pay is not property for the rules on property transferred for services.¹⁵³

Not needed.

§6048 reaches only foreign trusts.¹⁸

Article 18A(5) reaches this route as far as German relief exists; Article 18 covers payouts.

A direct commitment is one of the routes under section 1 of the Betriebsrentengesetz,² which the protocol recognizes,²³ so Article 18A(5) reaches it for a U.S. citizen living and working in Germany, as far as benefits qualify for German tax relief;^19,20 the 8% rule doesn't name this route.²⁵ German income tax counts only payments to a Pensionsfonds, a Pensionskasse or a direct insurance as current pay,¹⁴⁸ so on this route you are taxed when you are paid. On our reading that may be the relief the article means, but no IRS guidance says what relief counts here, and in the mirror case of U.S. plans the protocol names section 3 no. 63 as the relief Germany gives.¹⁴⁹ That is not settled. Payouts fall under Article 18, subject to the saving clause.^38,40

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts, and a promise with no assets set aside is not one.^18,44,45 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

An employer can back a direct commitment by putting assets with a trustee under a contractual trust arrangement,¹⁵⁴ and on our reading the employer alone pays in. We found no German statute that defines one, and the deeds vary, so check yours. German accounting law lets an employer set off against its pension obligations assets that are out of reach of all its other creditors and serve only those obligations,¹⁵⁵ and a contract can give a third party the right to demand performance directly,¹⁵⁶ which, on our reading, is how a deed can give employees rights if the employer fails.

A foreign trust, on our reading, that the employer sets up to back its own pension promise.

A foreign trust, on our reading. A trustee takes title to assets to protect them for a pension purpose, the pattern of a U.S. trust,¹¹ and an arrangement under German law run in Germany meets neither test for a domestic trust.^79,80 No IRS guidance applies Forms 3520 and 3520-A to one. For German tax, assets in a fiduciary relationship are attributed to the person who handed them over,¹⁵⁷ and the U.S. and German tax authorities build on that for dividends: a CTA's dividends get treaty relief provided its assets are treated as owned by the employer under that rule.^158,159 That agreement says nothing on Form 3520.

Not settled: the employer's funding could be U.S. income to you once vested. You are not the owner.

Not settled, and no IRS guidance addresses it. §402(b) reaches an employer's contributions to an employees' trust once your interest is vested,^12,84 and the rules on property transferred for services count a beneficial interest in assets set aside from the transferor's creditors, for example in a trust.¹⁵³ German accounting law looks for just that protection.¹⁵⁵ So the employer's funding could be U.S. income to you once your benefit vests, unless Article 18A(5) keeps it out. This guide does not calculate that amount; the regulations have an actuarial method where an employee's share isn't known.⁹⁷

You are not treated as owner of any part of it.⁸⁷ On our reading the employer is, because the limit on foreign owners doesn't apply to a compensatory trust, whether or not its assets are out of creditors' reach.^102,160

Where salary conversion funds the promise, you give up pay for the employer's promise,¹⁵² and the employer puts assets with the trustee,¹⁵⁴ so on our reading you transfer nothing to the trust. No IRS guidance addresses this, and an amount paid in at your election is yours,¹⁶ which is how this guide reads salary conversion into a support fund, so it is not settled.

You are unlikely to need one: you transfer nothing and own nothing.

You are unlikely to need one, since on our reading you transfer nothing and own nothing. If a trustee pays you and you don't report the payment as compensation, Rev. Proc. 2020-17 would require a tax-favored trust with yearly reporting,^107,109 and we found neither for a CTA.

Article 18A(5) reaches the commitment, but only as far as German relief exists, which is not settled.

The commitment a CTA backs is an arrangement under section 1 of the Betriebsrentengesetz, which the protocol recognizes,^2,23 so Article 18A(5) reaches it for a U.S. citizen living and working in Germany. But it applies only as far as the contributions or benefits qualify for German tax relief,²⁰ and the 8% rule doesn't name this route.²⁵ German income tax counts only payments to a Pensionsfonds, a Pensionskasse or a direct insurance as current pay,¹⁴⁸ so on this route you are taxed when you are paid. On our reading that may be the relief the article means, but no IRS guidance says what relief counts here, and in the mirror case of U.S. plans the protocol names section 3 no. 63 as the relief Germany gives.¹⁴⁹ That is not settled. Payouts fall under Article 18, subject to the saving clause.^38,40

No Part I or Part II; Part III only if the trustee pays you and you don't report it as compensation.

No Part I: you transfer nothing to the trust, and transfers to a §402(b) trust are excepted.⁹⁸ No Part II or Form 3520-A: on our reading you are not its owner,⁸⁷ though whether salary conversion changes that is not settled. Part III only if the trustee itself pays you and you do not report the payment as compensation income;^45,101,161 when the employer pays, nothing comes from the trust. No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules.^99,123 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

Civil servants have a separate scheme.¹⁶² Their pensions are non-contributory and are paid from current budgets.¹⁶³ Governments have also set up pension reserves and funds, which take transfers from their budgets to relieve those budgets later.¹⁶⁴

Public-sector employees receive an occupational pension,¹⁶⁵ for example through the VBL, an institution under public law¹⁶⁶ that the supervision law names on its own.¹⁶⁷ Its compulsory cover, VBLklassik, rests on collective agreements.¹⁶⁸ That cover is mixed. In the western tariff area it is financed by levies: contributions are not saved for you but pay current pensions.¹⁶⁹ In the eastern area it is part levy, part capital funding.¹⁷⁰ This block covers the levy part, and the next block covers the capital-funded part. Your employer pays the levy over and withholds any share of yours from your pay.¹⁷¹

Each other public-sector supplementary fund sets its own financing and may replace levies with capital funding step by step.¹⁷² One belongs in this block only if its own documents show your cover is levy-financed; otherwise read the next block.

Not a trust, on our reading: paid from public budgets or current levies, with nothing saved for you.

Not a trust, on our reading, and no IRS guidance addresses this cover. A trust for U.S. purposes needs trustees who take title to property to protect or conserve it for the beneficiaries.¹¹ A civil servant's pension is a claim on the public employer, paid from its budget,^163,173 and the reserves and funds exist to relieve that budget, not to hold anything for you.¹⁶⁴

VBL's levy pays current pensions and is not saved for you,¹⁶⁹ and your pension points are a record on an account, not a share of a fund.¹⁷⁴ VBL does invest money for its levy pools and calls its management of its assets fiduciary,¹⁷⁵ and its cover is compulsory with benefits set by a formula, as in the pension entity the IRS privately ruled a trust.⁶⁸ But on our reading those pools help to pay current pensions and hold no property for you.¹⁷⁰

Does not apply on our reading: there is no trust. How the employer's levy is taxed is not settled.

§402(b) reaches an employer's contributions to an employees' trust,¹² and on our reading this cover has no trust. A promise with nothing set aside for you is not property under the rules for property transferred for services,¹⁵³ so on our reading the employer's levy is not U.S. income to you when it is paid. No IRS guidance says how that levy, or the share withheld from your pay, is taxed, so that is not settled.

Not needed.

§6048 reaches only foreign trusts.¹⁸

Article 19(2) covers government service pensions; Article 18A(5) can reach VBL's levy; the saving clause keeps U.S. tax.

A pension paid by Germany, a state or a local authority, or out of funds it created, for services to it is taxable only in Germany, unless the person is a resident and a national of the U.S., when it is taxable only in the U.S.^176,177 Treasury says this is meant for retired civilian and military government employees,¹⁷⁸ so on our reading it does not reach a VBL pension for work for another kind of employer, and VBL's employers include others.¹⁷⁹ No IRS guidance says whether it reaches a VBL pension for work for a government. Treasury says Article 19 is subject to the saving clause for U.S. citizens and permanent residents, so they are taxed in the U.S. either way.¹⁸⁰ The saving clause itself speaks of all U.S. residents,³¹ and the exception for people without a green card names only Article 19(1)(b),³⁷ so whether a U.S. resident without a green card keeps this relief is not settled.

VBL's cover is an occupational pension under the Betriebsrentengesetz,¹⁸¹ so on our reading Article 18A(5) can keep the levy out of U.S. income for a U.S. citizen living in Germany and working there for a German employer, as far as it gets German relief and no further than a corresponding U.S. plan would allow.^19,20,21,23 Germany exempts an employer's payments into non-funded cover at a Pensionskasse up to 4% of the contribution ceiling, less what is exempt under the 8% rule,¹⁸² and VBL says part of the employer's share is taxed.¹⁸³ No IRS guidance says how this applies, so it is not settled. Any other VBL pension falls under Article 18, subject to the saving clause.^38,40

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts, and on our reading this cover is not one.^18,44,45 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^46,47

Versorgungswerke are compulsory old-age schemes under public law for self-employed people in certain professions,¹⁸⁴ and employed members can belong to one instead of the statutory pension.¹⁸⁵ They are funded: contributions and investment returns pay the pensions, with no state guarantee or subsidy,¹⁸⁶ though not every entitlement need be covered by capital alone.¹⁸⁷ A member pays a fixed share of income, and the statutes may allow extra voluntary payments up to a maximum.¹⁸⁸ An employed member's employer pays a subsidy equal to the share it would pay to the statutory pension.¹⁸⁹ German tax law treats the contributions alongside those to the statutory pension.¹⁹⁰

VBL's compulsory cover is mixed.¹⁷⁰ In the eastern tariff area part of it is capital-funded, with 2% each from employer and employee and a further employee contribution of 2.25%, on VBL's January 2025 figures,¹⁹¹ kept on a separate personal account with its income,¹⁹² and the levy steps in if that money falls short.¹⁹³ The levy part is in the block above. VBLextra, VBL's voluntary insurance, is fully funded,¹⁹⁴ and you can top up your pension with your own money through it.¹⁹⁵ For a researcher on a short contract it can replace VBLklassik, paid by the employer in the west and shared in the east.^196,197

Each other public-sector supplementary fund sets its own financing and may replace levies with capital funding step by step.¹⁷² We could not confirm how each is financed, so this guide treats one as funded unless its own documents show otherwise. A Pensionskasse of a private employer follows the Pensionskasse blocks, by its legal form.⁵¹

Not settled: public-law bodies, yet funded pension bodies like one the IRS ruled a trust. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses these schemes. The argument that they are trusts: an arrangement's nature, purpose and operations matter most, and its legal form is evidence but not decisive, as the Fifth Circuit said of a Liechtenstein Stiftung.^66,67 In a private ruling the IRS held a foreign pension entity to be a trust although a statute governed it, a government body regulated it, participation was mandatory, and its benefits followed a formula.^68,69,198 Chief Counsel advice, which is not precedent, treated Singapore's statutory Central Provident Fund as a §402(b) trust.¹⁹⁹ These schemes hold invested money to pay pensions,^186,200 VBL keeps capital-funded contributions and their income on a separate personal account,¹⁹² and it calls its management of its assets fiduciary.¹⁷⁵ BaFin says some public-sector supplementary funds are also Pensionskassen.²⁰¹

The argument that they are not: each is a public-law institution, not a trustee,^202,166 and a trust for U.S. purposes needs trustees who take title to property for the beneficiaries.¹¹ IRS advice on Liechtenstein entities, which is not precedent, lists a trustee with legal title among a trust's elements.²⁰³ A Versorgungswerk's cover rests on a duty imposed by or under law,¹⁸⁵ its members run it themselves,²⁰² and a trust's beneficiaries cannot share in the responsibility for the property.⁵⁹ VBL's cover rests on collective agreements,¹⁶⁸ and VBLextra is written as an insurance contract on terms the regulator approved.²⁰⁴

With the question open and the penalty for a missing Form 3520-A large,⁷⁸ this guide takes the cautious course of reading a funded public-law scheme as a trust. Governed by German law and run in Germany, it would meet neither test for a domestic trust, so it would be foreign.^79,80

An employer has paid in for you: on the cautious reading, a §402(b) trust. None has: §402(b) taxes nothing to you.

Where an employer pays in, as in VBL's capital-funded cover, VBLextra for researchers, or a Versorgungswerk with an employer's subsidy, on the cautious reading it is a §402(b) employees' trust: an employer pays in for its employees, and a trust created outside the United States cannot be exempt under U.S. §501(a).⁸² §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁸³ and on our reading nothing suggests this plan meets §401(a). Employer contributions are U.S. income to you when paid, to the extent vested, and the value of an interest that vests later is income in that year,^12,84,86 and the foreign earned income exclusion cannot cover them.⁸⁵ VBL says your own funded contributions in the east, and VBLextra, vest at once.^205,206 You are not owner of the part they fund.⁸⁷

Compulsory money withheld from your pay counts as the employer's: Chief Counsel advice on Singapore's fund, which is not precedent, treats a compulsory share withheld from pay as an employer contribution.²⁰⁷ On that advice, VBL's compulsory employee share counts as the employer's, even though in the east it is larger than the employer's 2%.^191,208 An employer's subsidy to a Versorgungswerk member is the employer's.¹⁸⁹ If you pay your own compulsory share yourself rather than having it withheld, that advice does not cover it, and the cautious course counts it as yours.

Voluntary money is your own: extra payments, VBLextra top-ups and salary conversion.^16,17 Once your own money exceeds the employer's, you are treated as owner of the part it funds, if the grantor trust rules are otherwise met.⁹⁴ In a pooled plan, whether they are met is not settled, and this guide keeps the cautious course.⁹⁶ No contribution to a §402(b) trust is a Part I event.⁹⁸ Payouts from the employer's part are taxed under §72,⁹⁹ and they stay off Part III if you report them as compensation income,^101,102 unlike payouts from a part you own.¹⁰³ The highly compensated employee rule can apply.¹⁰⁴

Where no employer has paid in for you, as for a member who has always been self-employed, or someone paying VBLextra alone, §402(b) taxes nothing to you: it reaches only an employer's contributions.¹²

Rev. Proc. 2020-17: possible, with each scheme's rules to check. Proposed regulations: possible, with a value test.

Rev. Proc. 2020-17 exempts an eligible individual¹⁰⁵ for a retirement trust that meets its conditions,¹⁰⁶ and these schemes point toward several, subject to each scheme's own rules. They are tax-favored: Versorgungswerk contributions are deductible,^190,107 and VBL says contributions to its capital funding are generally exempt.²⁰⁹ Versorgungswerke and Pensionskassen must report pension payments to the central office named in the income tax act,^210,109 which we read as meeting the yearly reporting condition, and an employer's yearly wage report shows contributions to a Versorgungswerk.²¹¹ Contributions follow income from work: a Versorgungswerk charges a fixed share of declared income,^188,110 and VBL's compulsory money is a share of pay,¹⁹¹ though VBLextra can be continued with your own money after you leave,²¹² which we read as not defeating the condition; that is not settled. And benefits are pensions: a Versorgungswerk pays monthly pensions with no lump sum,²¹³ and VBLextra refunds no contributions.^206,115

Two turn on the scheme. Rev. Proc. 2020-17 wants contributions limited by a percentage of earned income or a dollar cap.¹¹⁶ Compulsory money is a percentage of income or pay, and statutes that allow voluntary payments may cap the total,¹⁸⁸ but we did not read each statute, and we found no such cap for VBLextra. And an employer plan must cover a wide range of employees:¹¹⁷ VBL's compulsory cover reaches public-sector employees,¹⁶⁵ while on our reading a Versorgungswerk is not maintained by an employer. With no IRS guidance on these schemes, whether Rev. Proc. 2020-17 covers yours is not settled.

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹¹⁹ let a value test stand in for a contribution limit. They test "the aggregate value of the trust(s) in the trust's jurisdiction", at or under US$600,000 at every point in the year (adjusted for inflation from 2026).¹²⁰ On our reading that adds together all your trusts in Germany, but a pooled fund read as one trust may fail on that wording. The employer condition stays for an employer's plan.¹²¹

Article 18A(5) can reach VBL, not a Versorgungswerk; Article 18A(1) can defer, not settled; neither removes this reporting.

VBL's cover is an occupational pension under the Betriebsrentengesetz,^181,165 so on our reading Article 18A(5) can keep contributions, yours and your employer's, and accrued benefits out of U.S. income for a U.S. citizen living in Germany and working there for a German employer, as far as they get German relief and no further than a corresponding U.S. plan would allow.^{19,20,21,23,25} Treasury applies Article 18A(5) to plans under section 1 of that act,²⁴ and on our reading a Versorgungswerk is not one, since it rests on state law for chamber professions,²¹⁴ so Article 18A(5) does not reach it.

For a U.S. resident, on our reading Article 18A(1) can defer U.S. tax on the income of a part you own: its definition of a pension plan is general, and the protocol's list of plans says "shall include",^29,215,216 but no IRS guidance confirms it for a Versorgungswerk, so it is not settled. The saving clause spares that rule.³² On our reading a U.S. citizen living in Germany is a resident of Germany for it,³⁴ though Treasury's words point the other way, so that is not settled either.³⁵

Article 19(2) covers pensions for services rendered to the state,¹⁷⁷ which a self-employed member does not render. Treasury says the treaty's "other public pensions" refers to U.S. Tier 1 Railroad Retirement benefits,²¹⁷ so on our reading Article 18(5) does not reach a Versorgungswerk pension, and the saving clause leaves a U.S. citizen or resident taxable on it.³¹ A pension under Article 18 is subject to the saving clause too.^38,40 No IRS guidance addresses these points. Form 8833: the cautious reading is to disclose an Article 18A(1) deferral unless the amounts are $10,000 or less in the year.^42,43 The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

No employer money for you: full reporting. Otherwise: Part II and Form 3520-A once your own money exceeds the employer's.

Where no employer has paid in for you, on the cautious course you report it as a foreign trust you own. You are treated as its owner, including for money paid in before you became a U.S. person, because its income is held for you,^96,95 though in a pooled scheme whether that is so is not settled. Part II and Form 3520-A are due each year,⁴⁴ and payouts go on Part III.⁴⁵ Each contribution you make as a U.S. person is a Part I transfer,¹⁸ and one made within 5 years before your U.S. residency started is treated as made on your residency starting date and goes on Part I for that year.²¹⁸ The statute's Part I exception tests the trust, not who funded you,⁹⁸ and a regulation describes a nonexempt employees' trust as including one created on behalf of a self-employed individual,²¹⁹ so in a scheme with employer money for other members Part I may not be due. No IRS guidance says whether a member with no employer money is within an employees' trust, so the cautious course reports each contribution; a missed Part I can cost the greater of $10,000 or 35% of it, capped at the amount.²²⁰ On the same cautious course, Part I also applies at your death as a U.S. citizen or resident, if any part of the scheme is then treated as owned by you or is in your gross estate, unless the exception for a §402(b) trust reaches the scheme, as it may: your executor reports it, whether or not the executor is a U.S. person.^221,98