This is a common misconception. Perhaps your country differs. But under UK tax law, taxes must be paid on the dividends that are undistributed but reinvested internally in an accumulating ETF. One has to refer to the information on the ETF providerās website to find out what amount of dividends are reportable and then declare them and pay tax. Governments are not so stupid as to allow accumulating ETFs to provide a tax loophole for investors while distributing ones do not!