A regulated investment fund, hedge fund, private equity fund, real estate investment trust (REIT), UCITS, AIF, mutual fund, or fund manager asks about sector-specific tax.
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Luxembourg UCITS subscription tax (taxe d'abonnement) — standard rate
0.05% per annum on NAVLuxembourg Law on Undertakings for Collective Investment (UCI Law 2010)
Luxembourg UCITS subscription tax (taxe d'abonnement) — reduced rate
0.01% per annum on NAVLuxembourg Law on Undertakings for Collective Investment (UCI Law 2010)
Ireland ICAV/UCITS — Corporate Income Tax exemption
Exempt from CIT; Investment Undertaking Tax (IUT) applies only to Irish resident investorsTaxes Consolidation Act 1997 (TCA) s.739D
Luxembourg SIF subscription tax
0.01% of NAV; no CITLuxembourg Law 13 February 2007 on Specialised Investment Funds
Luxembourg SICAR subscription tax
Subscription tax-exempt; CIT applies with extensive participation exemptionLuxembourg Law on Société d'Investissement en Capital à Risque (SICAR) 2004
Luxembourg RAIF — regime choice
Choice of SIF-style or SICAR-style tax treatmentLuxembourg Law 23 July 2016 on Reserved Alternative Investment Funds
Luxembourg SCSp — tax treatment
Tax-transparent (partnership)Luxembourg Law 12 July 2013 on Alternative Investment Fund Managers
US — carried interest long-term capital gain holding period (post-TCJA 2017)
3 years (raised from 1 year by TCJA 2017); otherwise treated as short-term/ordinary incomeInternal Revenue Code §1061 (Tax Cuts and Jobs Act 2017)
US — carried interest LTCG effective rate
~20%Internal Revenue Code §1061; IRC §1(h)
US — carried interest short-term/ordinary effective rate
~37%Internal Revenue Code §1061; IRC §1
UK — carried interest effective rate (reformed from April 2025)
32% (proposed from April 2025; consultation ongoing)UK Finance Act / HM Treasury consultation on carried interest reform
UK — Disguised Investment Management Fees (DIMF) regime in force since
2015Finance Act 2015 (DIMF rules)
Italy — carried interest capital gain rate (if conditions met)
26%Italian Income Tax Code (TUIR); Decree Law 50/2017 on carried interest
Germany — proportion of carried interest treated as employment income
60% treated as employment incomeGerman Investment Tax Act (InvStG); German Income Tax Act (EStG) — Halbeinkünfteverfahren
Spain — carried interest top effective rate (new 2025 rules as employment income)
Up to ~50%Spanish Personal Income Tax Act (Ley 35/2006); 2025 regulatory reform
PFIC passive income threshold (gross income test)
≥75% of gross income is passiveInternal Revenue Code §1297
PFIC passive asset threshold (asset test)
≥50% of average assets produce passive incomeInternal Revenue Code §1297
PFIC active insurance corporation exception
Active insurance corporations excluded under §1297(f)Internal Revenue Code §1297(f)
US REIT gross income test — real estate income
75% of gross income from real estate (rents, mortgages, gains on real estate)Internal Revenue Code §§856–860
US REIT gross income test — total passive income
95% of gross income passive (real estate income + interest, dividends, gains)Internal Revenue Code §§856–860
US REIT asset test
75% of assets in real estate, mortgages, cash, or government securitiesInternal Revenue Code §§856–860
US REIT minimum distribution requirement
90% of taxable income distributed to shareholdersInternal Revenue Code §§856–860
US REIT minimum shareholder count
≥100 shareholdersInternal Revenue Code §§856–860
US REIT §199A deduction for qualified REIT dividends (post-TCJA, confirmed permanent in OBBBA)
20% deduction on qualified REIT dividendsInternal Revenue Code §199A (Tax Cuts and Jobs Act 2017; One Big Beautiful Bill Act)
UK REIT gross income test
75% of gross income from rental of UK propertyFinance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT asset value test
75% of asset value in property rental businessFinance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT listing requirement — institutional ownership alternative
Listed on recognised stock exchange OR 35% rule for institutional ownershipFinance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT distribution requirement
90% distribution requirementFinance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT non-resident investor cap during initial period
75% non-resident-investor cap during 3 years from entryFinance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT Property Income Distribution (PID) — basic rate income tax
20%Finance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT Property Income Distribution (PID) — higher rate income tax
40%Finance Act 2006; Corporation Tax Act 2010 Part 12
UK REIT Property Income Distribution (PID) — additional rate income tax
45%Finance Act 2006; Corporation Tax Act 2010 Part 12
French SIIC — rental income distribution requirement
85% of rental income must be distributedFrench Tax Code (Code Général des Impôts) — SIIC regime
French SIIC — capital gain distribution requirement
50% of capital gains must be distributedFrench Tax Code (Code Général des Impôts) — SIIC regime
Spanish SOCIMI — asset and gross income concentration in real estate
80% of assets and gross income must be in real estateSpanish SOCIMI Law (Ley 11/2009)
Spanish SOCIMI — rental income distribution requirement
80% of rental income distributedSpanish SOCIMI Law (Ley 11/2009)
Spanish SOCIMI — REIT-source dividend distribution requirement
100% of REIT-source distributions must be distributedSpanish SOCIMI Law (Ley 11/2009)
Spanish SOCIMI — capital gains distribution requirement (over 3-year period)
50% of capital gains distributed over 3 yearsSpanish SOCIMI Law (Ley 11/2009)
Spanish SOCIMI — Corporate Income Tax rate
0% CITSpanish SOCIMI Law (Ley 11/2009)
Spanish SOCIMI — specific levy on dividend distributions
19% levy on dividend distributionsSpanish SOCIMI Law (Ley 11/2009)
Singapore S-REIT distribution requirement
90% distribution requirementIncome Tax Act (Singapore); MAS Property Fund Guidelines
Japan J-REIT distribution requirement
90% distribution requirementAct on Investment Trusts and Investment Corporations (Japan)
Australia AMIT (Attribution Managed Investment Trust) regime effective from
2016Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act 2016 (Australia)
Pillar Two GloBE — Investment Entity income exclusion
GloBE Income excludes Investment Entity income per Article 7OECD Pillar Two Model Rules (GloBE Rules) Article 7
A sector overlay for investment funds and REITs covering fund-level, GP-level, and investor-level taxation.
[T1] Two foundational models
| Model | Fund-level tax | Investor-level tax |
|---|---|---|
| Tax-transparent | None (the fund "looks through" to investors) | Investor taxed on its share of fund income as if directly held |
| Tax-opaque (blocker) | Fund pays CIT (usually with offset for distributions) | Investor taxed only on distributions / dispositions |
[T1] UCITS funds (Undertaking for the Collective Investment in Transferable Securities) under Directive 2009/65/EC are usually structured as:
Investment company with variable capital (SICAV in Luxembourg, ICAV in Ireland)
Common contractual fund (FCP in Luxembourg / France)
Unit trust (UK)
Luxembourg UCITS fund-level tax — Subscription tax (taxe d'abonnement) — 0.05% / 0.01% (annual on NAV); no CIT on UCITS profits (Luxembourg fund-level tax)
Ireland UCITS fund-level tax — ICAV / UCITS exempt CIT under TCA s.739D — Investment Undertaking Tax (IUT) only on Irish resident investors (TCA s.739D)
France UCITS fund-level tax — FCP transparent; SICAV with specific regime (Fund-level tax)
UK UCITS fund-level tax — Authorised funds with specific UK fund tax regime (Fund-level tax)
[T1] AIFs under AIFMD (Directive 2011/61/EU) have wider product range:
Tax treatment depends on legal form and jurisdiction; typically tax-transparent or low-tax-blocker.
Specific Luxembourg vehicles
| Vehicle | Tax |
|---|---|
| SIF (Specialised Investment Fund) | Subscription tax 0.01% NAV; no CIT (Lux Law 13 February 2007) |
| RAIF (Reserved Alternative Investment Fund) | Choice of SIF-style or SICAR-style; flexible (Law 23 July 2016) |
| SICAR (Société d'Investissement en Capital à Risque) | Subscription tax-exempt; CIT but with extensive participation exemption; capital risk |
| SCSp (Special Limited Partnership) | Tax-transparent (partnership) (Law 12 July 2013) |
[T1] By jurisdiction
| Country | Treatment | Effective rate |
|---|---|---|
| United States | §1061 ITA: carried interest classified as long-term capital gain only if 3-year holding period (raised from 1 year by TCJA 2017); otherwise short-term ordinary | ~20% LTCG vs 37% short-term/ordinary |
| United Kingdom | Carried Interest from April 2025: 32% effective rate (reformed from CGT-only treatment); Disguised Investment Management Fees (DIMF) since 2015 | 32% (proposed from April 2025; consultation ongoing) |
| France | Carried interest treated as employment income (and capital gain on disposal) for managers; specific holding period requirement | Effective marginal rate close to top income tax |
| Italy | Carried interest classified as investment income if specific conditions met (commitment / employment) | 26% capital gain rate possible |
| Germany | 60% of carried interest treated as employment income (Halbeinkünfteverfahren) — favourable | Reduced rate |
| Spain | New 2025 rules characterise carried interest as employment income absent specific conditions | Up to ~50% |
insurance-sector.md. (§1297(f))[T1] Less popular than other markets; ~5 G-REITs listed.
Blocker entity purposes — "Blocker" entities interpose tax-opaque vehicles to: Convert ordinary income to capital gains for US investors; Block US ECI for foreign LP investors; Prevent CFC consequences for US shareholders; Avoid PFIC exposure for US-taxable investors ([T1])
US-blocker (C-corp) below partnership / LLC
Cayman or BVI blocker above offshore investments
Luxembourg SICAV/SCSp for EU fund families
Multi-tier structures with hybrid mismatches (now constrained by ATAD II)
Fund and REIT taxation is highly specialised and varies dramatically by structure. Outputs must be reviewed by credentialed fund-sector practitioners. The most up-to-date version is at openaccountants.com.
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Other GLOBAL computations in the OpenAccountants Tax Library.
Rendered from the facts database. General reference only — confirm with a qualified professional before acting.
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