Yes, index funds are taxed. The specific taxes you may owe on your index fund investments will depend on several factors, including: 1. Investment type: If you own an index fund that invests in stocks, you may owe taxes on any dividends or capital gains from stock sales. If you own an index fund that invests in bonds, you may owe taxes on any interest income. 2. Tax status: The tax treatment of your index fund investments will depend on whether you hold them in a taxable or tax-advantaged account. For example, if you hold index funds in a traditional brokerage account, you will owe taxes on any dividends, capital gains, or interest income. If you hold index funds in a tax-deferred retirement account, such as a 401(k) or an IRA, you will not owe taxes until you withdraw the funds in retirement. 3. Location: The tax laws of your country of residence will dictate the specific taxes you owe on your index fund investments. It's important to understand the tax implications of your index fund investments and to consult a tax professional if you have any questions or concerns.