That depends on which country you live in. In my country (The Netherlands) you pay a fixed percentage of the value of your portfolio. Dividends are not taxed.
and you have to care about where the index fund is domiciled. Otherwise you get dividend leakage. Some Vanguards are domiciled in Reland where 30% of dividends are withheld as taxes even though we need to pay just 15%. It might be difficult to get the difference back
I wish.
But no, dividends are taxed:
https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/...
What you probably miss is that dividend tax for non substantial holdings (less than 5% of the total stock) is withheld before being paid out.