Luxembourg offers a favorable and stable tax environment for investment funds. It has:
an extensive network of double tax treaties with countries around the globe to prevent double taxation of the same income;
adopted all major international standards for tax transparency and exchange of information, which makes it a trusted and reliable place for investment funds, in an era where there's growing international scrutiny of tax evasion;
exempted management fees from VAT;
a lower VAT rate than most jurisdictions for other services (16/17% vs 20/21%);
a stable and predictable political and economic environments.
However, the tax treatment may vary based on factors such as investor jurisdictions and the nature of investments.