Abstract: This study aims to analyze empirically whether fund investors make their fund investment decision by considering the change in fund taxation, which is the sunset of offset of the qualifying investment losses. This study analyzes the change in investment cash flow to overseas investment funds upon the enactment of the sunset clause under the Korean tax law in 2014, which discontinued the offset of certain losses incurred in the fund for tax purposes. In order to do that, this study examines any change in cash flow to overseas investment funds at the time of the announcement of sunset of the offset of the qualified investment loss (i.e., 6 August, 2014) and the actual sunset of the offset (i.e., 31 December, 2014) by leveraging the multivariate analysis utilized in prior studies. This study finds that cash flows to the overseas investment funds subject to the sunset provision were significantly decreased for the period following the announcement of the sunset to the actual sunset. The same results were obtained even in case where foreign exchange factors are considered and the samples are narrowed down to funds established before 1 June, 2007. Such finding suggests fund investors attempted to reduce their tax burden by redeeming their funds after the announcement date upon gaining awareness of the limited period to offset a qualified loss in relation to the offshore-listed shares. This is in line with discussions in the prior studies, which demonstrate that change in taxation of certain investments may affect the investor’s investment decision. Given that only a few empirical studies have focused on the tax factors on investment in fund when certain taxation rules have expired, the present study contributes to the literature by identifying the effects of fund taxation on fund investment when a specific favorable tax has sunset.