ETF taxation: ten European countries compared

Before comparing percentages, you have to understand that they do not apply to the same thing. Europe uses three mechanisms, and confusing them leads to wrong conclusions.

1. Tax on the realised capital gain. You only pay when you sell, and only on the gain. This covers France, Germany, Spain, Italy, Portugal and — since 2026 — Belgium. As long as you do not sell, the whole capital keeps compounding.

2. An annual tax on holdings. The Netherlands and Switzerland do not tax your gain: they tax your wealth, every year, whether the year was good or bad. The levy looks smaller, but it eats into the base that compounds each year — and it lands even when you lose money.

3. Deemed disposal. Ireland treats you as having sold every eight years, even if you did nothing, and taxes the unrealised gain. Compounding is therefore interrupted by force, three or four times over an investing lifetime.

France — 30 %, unless wrapped

The single flat-rate levy combines 12.8 % income tax and 17.2 % social contributions, due on sale. Two wrappers change the result completely: a PEA older than five years leaves only the 17.2 % social contributions, and life insurance older than eight years comes down to around 24.7 % before allowance. We develop this in our guide on PEA versus brokerage account.

Belgium — 10 % since 2026

The most significant change of the year. Since 1 January 2026, capital gains on financial assets are taxed at 10 %, with a €10,000 allowance per person per year. Only gains built up from 2026 onwards are covered: the portfolio's value on 31 December 2025 serves as the reference point. On top of that sit the stock exchange transaction tax and 30 % withholding tax on distributed dividends. Details in our dedicated guide: Belgium's capital gains tax.

Germany — 26.375 % brought down to 18.5 %

The 25 % Abgeltungsteuer is increased by a 5.5 % solidarity surcharge. For an equity fund, the Teilfreistellung exempts 30 % of the gain, bringing the effective rate to around 18.5 %. The annual allowance (Sparerpauschbetrag) and any church tax further alter the real calculation.

Netherlands — the most misunderstood case

No capital gains tax, but box 3 assumes for 2026 a deemed return of 6.00 % on investments, taxed at 36 %: that is 2.16 % of holdings every year, above an exempt amount of €59,357 per person. The levy does not depend on your actual performance: a losing year costs you anyway. The option to claim a lower actual return exists, but it is not automatic.

Switzerland — nothing on gains, but wealth is taxed

Private capital gains are not taxed, which makes this one of Europe's most favourable regimes for a long-term investor. In exchange, a cantonal wealth tax hits your assets every year, in the region of 0.3 % to 0.7 % depending on canton and amount. Dividends are taxed as income.

Ireland — the eight-year trap

41 % on gains, and above all a deemed disposal every eight years even without a sale. Compounding is interrupted by force: it is the harshest rule on the continent for a passive ETF investor. Paradoxically, Ireland is where most European ETFs are domiciled — the fund's domicile and the investor's residence are two entirely separate things.

Luxembourg — exempt after six months

Capital gains on securities held for more than six months are exempt for an individual holding less than 10 % of the capital, which is always the case with an ETF. Distributed dividends remain taxable.

One point the table does not show: before your personal tax even applies, the fund has already suffered withholding tax on the dividends of the companies it holds. An ETF domiciled in Ireland recovers, under the Ireland–United States tax treaty, part of the American withholding that a fund domiciled elsewhere does not necessarily recover — a gap of a few tenths of a point a year on a US index.

That is one of the reasons the vast majority of ETFs sold in Europe carry an ISIN beginning with IE. The choice is already made for you by the issuer; it has nothing to do with the country where you pay tax.

These rules are built into Cumulo's calculator: pick your country, and the projection separates gross capital, tax and inflation. It is the only honest way to compare two regimes, since one strikes once and the other every year.

Compare in the calculator

Which European country taxes ETFs the least?

For a long-term investor, Luxembourg and Switzerland are the most favourable on capital gains: they are exempt. Switzerland offsets this with an annual cantonal wealth tax of 0.3 % to 0.7 %. Belgium, at 10 % with a €10,000 annual allowance since 2026, is also among the mildest regimes in Western Europe.

Which country taxes ETFs the most?

Ireland, at 41 % on gains and, above all, a deemed disposal every eight years that interrupts compounding even without a sale. Over a long horizon the Netherlands is also very costly despite having no capital gains tax, because the 2.16 % taken from holdings each year compounds against the investor.

Should I choose an ETF based on its tax domicile?

The fund's domicile determines the withholding tax it suffers on its holdings' dividends, not your personal tax. ETFs domiciled in Ireland, whose ISIN starts with IE, recover part of the US withholding. Your own taxation depends solely on your country of residence.

Is an accumulating ETF taxed less than a distributing one?

In countries that tax capital gains on sale, yes in practice: an accumulating ETF triggers no taxable event until you sell, whereas a distributing one triggers tax on every dividend paid. In countries that tax holdings, such as the Netherlands, the distinction has no effect.

Are these rates up to date?

The rules shown reflect the position as at 1 January 2026. Savings taxation changes frequently: this page is a general summary rather than tax advice, and your national tax authority remains the only authoritative source.