What kind of tax difference do you mean?
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@Dividensenmann TLDR: US dividends are very favorable. So rather mini advantage.
Anyone who calls themselves Divden... should know that 😂
ChatCPG:
Whether an ETF domiciled in Luxembourg or Ireland is better depends on a number of factors, including tax advantages, cost structure and regulatory differences. Both countries are very popular domiciles for ETFs in Europe. Here are some key differences and considerations:
1. tax advantages
- Ireland: ETFs launched in Ireland often have tax advantages, especially for dividends from US stocks. Irish ETFs are subject to a favorable double tax treaty with the US, which means that dividends from US stocks are subject to a withholding tax of only 15% instead of the regular 30%.
- Luxembourg: Luxembourg also offers favorable tax conditions, but the advantage for US dividends is not as pronounced as in Ireland. A withholding tax of 30% is generally levied on US dividends here, which can reduce the net income from these shares.
2 Regulatory differences
- Ireland: ETFs in Ireland are subject to the regulations of the Central Bank of Ireland. Ireland is a very popular location for ETFs due to its efficient fund ecosystem and strong financial regulation.
- Luxembourg: ETFs from Luxembourg are subject to the regulations of the Commission de Surveillance du Secteur Financier (CSSF), which is considered to be very stable and well regulated. Luxembourg is known for its strong fund management and many years of experience in the investment fund sector.
3. cost structure
- ETFs from both countries generally have low management costs. However, Ireland is often preferred because many large ETF providers such as Vanguard and iShares launch their European ETFs there, which can lead to more competitive costs.
4. accumulating vs. distributing
- Both Luxembourg and Ireland offer accumulating (reinvestment of income) and distributing ETFs. Depending on your tax situation, an accumulating ETF could offer advantages in your country.
5 Popularity and availability
- Ireland has established itself as a leading location for European ETFs in recent years, particularly due to the tax advantages of US equities. Many of the largest ETFs in Europe are domiciled in Ireland.
Conclusion:
For European investors, Irish ETFs are often more attractive due to the more favorable taxation of US dividends, especially if the ETF is heavily invested in US equities. On the other hand, if the ETF invests in other markets or if the tax aspect is not so important to you, ETFs in Luxembourg are also a solid option.
Anyone who calls themselves Divden... should know that 😂
ChatCPG:
Whether an ETF domiciled in Luxembourg or Ireland is better depends on a number of factors, including tax advantages, cost structure and regulatory differences. Both countries are very popular domiciles for ETFs in Europe. Here are some key differences and considerations:
1. tax advantages
- Ireland: ETFs launched in Ireland often have tax advantages, especially for dividends from US stocks. Irish ETFs are subject to a favorable double tax treaty with the US, which means that dividends from US stocks are subject to a withholding tax of only 15% instead of the regular 30%.
- Luxembourg: Luxembourg also offers favorable tax conditions, but the advantage for US dividends is not as pronounced as in Ireland. A withholding tax of 30% is generally levied on US dividends here, which can reduce the net income from these shares.
2 Regulatory differences
- Ireland: ETFs in Ireland are subject to the regulations of the Central Bank of Ireland. Ireland is a very popular location for ETFs due to its efficient fund ecosystem and strong financial regulation.
- Luxembourg: ETFs from Luxembourg are subject to the regulations of the Commission de Surveillance du Secteur Financier (CSSF), which is considered to be very stable and well regulated. Luxembourg is known for its strong fund management and many years of experience in the investment fund sector.
3. cost structure
- ETFs from both countries generally have low management costs. However, Ireland is often preferred because many large ETF providers such as Vanguard and iShares launch their European ETFs there, which can lead to more competitive costs.
4. accumulating vs. distributing
- Both Luxembourg and Ireland offer accumulating (reinvestment of income) and distributing ETFs. Depending on your tax situation, an accumulating ETF could offer advantages in your country.
5 Popularity and availability
- Ireland has established itself as a leading location for European ETFs in recent years, particularly due to the tax advantages of US equities. Many of the largest ETFs in Europe are domiciled in Ireland.
Conclusion:
For European investors, Irish ETFs are often more attractive due to the more favorable taxation of US dividends, especially if the ETF is heavily invested in US equities. On the other hand, if the ETF invests in other markets or if the tax aspect is not so important to you, ETFs in Luxembourg are also a solid option.
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@Papiertiger In Luxembourg, however, this depends on the legal form. These ETFs should also have only paid 15% on US dividends so far. Feel free to ask ChatGPT again whether he is sure and whether he knows the difference between FCP and SICAV...
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