The deciding factor: US withholding tax
Ireland has a tax treaty with the US that lowers withholding on US dividends to 15%. Luxembourg's treaty does not deliver the same benefit for ETFs — Luxembourg-domiciled funds typically suffer 30% on US dividends. For any fund with meaningful US exposure (S&P 500, Nasdaq, global), that 15-point gap makes Ireland the clear winner.
How to tell the domicile
- ISIN prefix — Irish funds start with `IE`, Luxembourg with `LU`.
- Fund fact sheets and the KID state the domicile explicitly.
- On UCITSIncome, domicile is shown on each fund's detail page.
When Luxembourg is fine
For funds with little or no US dividend exposure — European equities, many bond funds, emerging-market or commodity products — the withholding advantage shrinks or disappears, and a Luxembourg domicile is perfectly reasonable. Cost, index and liquidity then matter more than the IE/LU label.
Either way, your own country's tax still applies — check it in the Tax Assessor, and see withholding tax explained for the mechanics.
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