Taxation in Monaco

Banks

Finance, Accounting & Auditing

Taxation

The general principle of Monegasque taxation is the complete absence of direct taxes. There are two exceptions to this rule:

Companies generating more than 25% of their revenue outside the Principality, and companies whose Monaco-based activity consists of earning income from patents or literary or artistic property rights, are subject to a 33.33% corporate tax.
French nationals who could not prove five years of residence in Monaco as of 31/10/1962 are subject to French income tax.
Apart from the treaty with France, the Principality has not signed any bilateral tax agreements.

Individuals

Individuals residing in Monaco (excluding French nationals) are subject to no income tax, capital gains tax, or wealth tax in the Principality.
For French nationals, only those who could prove five years of residence in Monaco as of 31/10/1962 fall under the general framework.

Property located in Monaco is subject to the following inheritance or transfer rates:

direct descendants: 0%
between brothers and sisters: 8%
between uncles and nephews: 10%
between other collateral relatives: 13%
between non-relatives: 16%

Companies – Corporate Income Tax (ISB)

Companies engaged in industrial or commercial activities that generate more than 25% of their turnover outside Monaco are subject to ISB (corporate income tax).

Taxes

Value Added Tax (VAT)

Value Added Tax (VAT) is levied on the same basis and at the same rates as in France; the intra-community VAT system has been applicable since January 1, 1993.

Real Estate Value Added Tax

VAT applies to the delivery of buildings carried out by a taxable person acting in that capacity.

Customs Regulations

French and Monegasque territories, including their territorial waters, form a customs union organized by the Customs Convention of May 18, 1963; thus, the French Customs Code applies in the Principality of Monaco. Due to its customs union with France, and to ensure strict compliance with this bilateral agreement, the Principality is incorporated into the European customs territory (while remaining a third country with respect to the European Union). Access to the European single market from Monaco is therefore guaranteed.