ETFs are considered tax-efficient due to their unique structure. Transactions within ETFs are typically conducted "in kind," meaning they involve the exchange of underlying assets rather than cash. This process does not create taxable events for shareholders, often resulting in fewer taxable distributions.
However, when you decide to sell an ETF, it triggers a taxable event, which is subject to capital gains or losses tax based on your local tax regulations.
We have compiled information on the most common tax regulations for different countries, which you can find here.
Note: This information is for general guidance only and should not be considered tax advice. Please consult your local tax authority or a qualified tax professional for specific guidance.