Irish ETF or US ETF?

Some funds tracking the S&P 500 are domiciled in the US (such as VOO), others in Ireland (such as CSPX and VUAA). The basket is the same and the price moves almost identically. Where they differ is the country the fund is set up in: that decides where and at what rate dividends are taxed, whether the US estate tax reaches the fund, and whether the fund pays dividends out at all. This article looks at the differences from the point of view of an investor resident in Türkiye; it doesn't recommend a fund.

Dividends: Where the Tax Is Taken

In both funds the dividends come from the same US companies. The difference is on whose behalf the tax is withheld and under which treaty.

In a US-domiciled fund, the US withholds tax when the fund pays the dividend on to you. For an individual resident in Türkiye who has filed a W-8BEN the rate is 20%; without the form, 30%. More: W-8BEN and 1042-S

In an Ireland-domiciled fund, the tax is taken one step earlier, when the company pays the dividend to the fund. The US–Ireland treaty cuts that rate to 15%. Ireland then takes nothing further from the fund's payments to holders: the Irish Revenue's manual says a fund does not deduct exit tax on ETF units held in a recognised clearing system.

For many countries this gap is large: 15 points for someone with no form or whose treaty leaves the rate at 30%. For a Turkish resident it's 5 points, because the US–Türkiye treaty already gives 20%. Five points move the yearly return very little, about as much as the gap in expense ratios.

Estate Tax: The $60,000 Threshold

When someone who is neither a US citizen nor a US resident dies, the heirs must file a US estate tax return (Form 706-NA) if the person's US-situated assets are worth more than $60,000. The IRS notes that this threshold is not adjusted for inflation. The US and Türkiye have no treaty on estate tax.

Which assets count as "US-situated" is set out in the IRS form instructions: shares of corporations organised under US law are US property wherever the certificates are kept, and shares of other corporations are property outside the US. A share of a US-domiciled ETF is therefore a US asset; a share of an Ireland-domiciled fund, under that definition, is not.

For a portfolio under $60,000 this makes no difference today. It starts to matter as the portfolio grows, and individual US stocks count as US assets too; an Irish fund only takes the fund part out of the definition. Ireland's own inheritance rules are a separate question that this article doesn't cover; a large portfolio calls for a specialist.

Accumulating or Distributing

US funds such as VOO and QQQ pay dividends out in cash. Irish funds often come in two share classes for the same index: one pays dividends out, the other reinvests them inside the fund. The "Use of Income" line on the fund page tells you which; CSPX, VUAA and CNDX are accumulating classes.

For a Turkish tax return the difference is this: with a distributing class, dividends arrive every year and count toward the filing threshold like any foreign dividend. With an accumulating class no cash arrives during the year; the return stays inside the fund's price and shows up when you sell. How Türkiye classifies the gain on selling a foreign fund, and whether the cost can be indexed, is less clear-cut than for a single stock. Talk to a tax adviser before selling an accumulating fund.

Expense Ratios and Example Fund Pairs

Irish funds cost a little more than US funds tracking the same index. Figures from the fund managers' product pages, as of 24 October 2026:

The expense gap comes off the whole investment every year; the withholding gap only off the dividends. In a low-yield index such as the Nasdaq 100, the withholding gap is worth less while the expense gap stays the same.

Which Brokers Carry Them

Irish funds trade not on US exchanges but on European ones such as London and Frankfurt. The same fund can have several lines on different exchanges in different currencies; Vanguard's all-world fund trades in dollars in London as VWRA and in euros on Xetra as VWCE. Buying the euro line adds another currency layer on top of dollar assets.

A broker that only routes to US exchanges won't offer these funds. Check whether the broker's fee schedule has a London or German line, and read the commission there separately: minimum fees on European exchanges often differ from US ones. US fee schedules broker by broker, with sources: Broker Comparison

This article is based on the IRS tax treaty table and Form 706-NA instructions, the Irish Revenue's manual on investment undertakings and the fund managers' product pages, using sources read as of 24 October 2026. It is general information, not tax advice or investment advice.