2026 Finance Act: Impact for French Residents in Monaco

The 2026 Finance Act introduces several significant tax changes for French taxpayers, including those residing in Monaco. Against a backdrop of tighter anti-optimisation measures and budgetary adjustment, these provisions directly affect the wealth planning strategies of French expatriates established in the Principality.

A fundamental rule remains unchanged: taxation in France

Unlike other nationalities, French nationals settled in Monaco do not fully benefit from the absence of income tax in the Principality. Under the Franco-Monegasque tax treaty, they remain subject to French tax on all their income, as if they were resident in France.

This principle remains unchanged in 2026 and forms the foundation of the tax regime applicable to French residents in Monaco.

Revaluation of the income tax brackets

The 2026 Finance Act provides for the income tax brackets to be indexed to inflation. This measure aims to prevent a mechanical increase in taxation caused by the nominal rise in income.

For French nationals living in Monaco but taxed in France, this revaluation helps limit the tax impact, although it does not significantly reduce the overall burden for high earners.

New rules targeting wealth-holding structures

The Act also introduces targeted taxation on certain assets held through wealth-holding companies, particularly where those assets are not linked to a genuine economic activity.

This development reflects a clear intention on the part of the French authorities to curb tax optimisation strategies carried out through interposed structures.