Luxembourg's fund managers are considering taking the Belgian government to the European Union courts over a new tax on investment funds which it claims discriminates against foreign managers.

According to sources close to the matter, representatives of Luxembourg's €900bn ($1.06bn) fund industry are incensed by the new tax, which will be levied on domestic Belgian and foreign funds. Luxembourg-based funds already pay a five basis point tax in the domestic market, and will now be taxed a further 6bp in Belgium.