UCITS funds are taxed more favourably than harshly treated
offshore hedge funds in most European countries.
The investor pays tax according to their country of residence
and the taxation of funds falls into three different
that are out of scope of income tax law by definition; or
that are subject to tax but are exempt; or
that are taxed but at very low levels
The investment fund structure is intended to offer a service
to consumers, according to Georges Bock, partner and head of
tax for KPMG in Luxembourg.
One of the advantages of putting money into a fund is that it
gives consumers economies of scale - and therefore funds pay
little or no tax.
Bock says: "UCITS funds domiciled for example in Germany,
Ireland, UK and Luxembourg fall under category two...