More than a week after the new regulations on the taxation of capital market gains came into effect, managers of mutual funds due to calculate and hold taxes on investors'' gains are still unaware as to exactly what taxes they should levy on those withdrawing the money they placed. Amid the lack of clear stipulations and norms of applicability for the law, managers have chosen to interpret the law in the most advantageous way for investors and levy a tax of 1%.

Parliament has decided to postpone implementation of the new method of taxing gains from stock transactions to January 1 2006, while the taxation of gains from interest payments and real estate transactions came into effect starting June 1 2005. As regards mutual funds, things are still unclear.

"We will continue to levy the same 1% tax. This is what we have grasped from the law, considering we have no application norms.

"The law says that fund units acquired after 1st June 2005 and sold after 1st January 2006 will carry a 16% tax. This should mean that in the other situations, the older stipulations should be applied," says Dan Nicu, manager of SG Asset Management, BRD-SocGen''s specialised company. Nicu is also chairman of The National Union of Collective Placement Bodies (Uniunea Nationala a Organismelor de Plasament Colectiv), the professional union of fund managers.

Other managers have interpreted the law differently. "We will continue to levy 1%. The law speaks of a 10% tax, but the law is very ambiguous and does not specify the types of gains that are involved," said a representative of another management company. vlad.nicolaescu@zf.ro More than a week after the new regulations on the taxation of capital market gains came into effect, managers of mutual funds due to calculate and hold taxes on investors'' gains are still unaware as to exactly what taxe