Persistent taxation on EU investment fund unitholders

Investment funds have been one of the most important phenomena in EU financial markets over recent years. The effects of taxation on the final returns obtained by fund unitholders have been shown to be very different throughout the whole EU. By using an original tax methodology based on contingency tables, this paper provides evidence that private unitholders from several EU investment fund markets obtain systematically higher returns after taxes than private unitholders from other different EU countries in any investment scenario. The study proves that EU expansion in March 2004 has made this distorted competition stronger in the current EU fund industry.