The general principle of Monaco's tax system is the total absence of any direct taxes. There are 2 exceptions to this principle :
Apart from the agreements it has with France, the Principality has not signed any other bilateral fiscal agreements.
Private individuals residing in Monaco (except French nationals) are not subject to any tax on income, capital gains or capital in the Principality.
For French nationals, only those who can prove that they resided in the Principality for 5 years before 31/10/1962 are subject to the same system.
Assets in Monaco are subject to the following inheritance tax rates :
Businesses carrying out a commercial or industrial activity and generating over 25% of their turnover outside Monaco are subject to tax on their profits.
Value Added Tax (VAT) is collected on the same basis and at the same rates as in France. The intra-community VAT system has been applicable in Monaco since 1st January 1993.
VAT is applied to the supply of real estate by a taxable person acting as such.
The French and Monegasque territories, including their territorial waters, constitute a customs union, as established by the Customs Convention of 18th May 1963. The French Customs Code therefore applies in the Principality of Monaco. Due to its customs union with France, and to ensure that this bilateral agreement is strictly applied, the Principality is included in the European Customs Territory (even though it remains a third state with regard to the European Union). Goods and services in the Single European Market can thus be accessed from Monaco.
Registration fees are payable for registration formalities, either at a proportional rate (the usual rates are between 0.5% and 7.5%), or a fixed rate (of 10 €).
