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The unique advantages of Monaco's tax system

How does the tax system in Monaco work?

Monaco's tax system is unique and simple, operating with no income tax and a low business tax, making it a tax haven for individuals and foreign companies setting up in the Principality.

However, there are two exceptions to this almost total absence of taxation.

What are the two exceptions to Monaco's tax system?

1. Corporate income tax

Corporate income tax is the only direct tax on companies in the Principality. It applies to companies that make less than 75% of their turnover in the Principality and therefore more than 25% outside Monaco.

It also applies to companies deriving their income from patents and artistic property rights and to companies carrying out commercial or industrial activities. The latter are subject to a tax rate of 33.33% on all company profits.

Having the French nationality

All persons of French nationality who were not born in the Principality are subject to French income tax. This is due to the Principality's only bilateral tax treaty, the customs union between France and Monaco, established in the 1963 Franco-Monegasque Customs Convention.

What are the tax laws for private individuals in Monaco?

Private individuals are exempt from all income, capital gains and capital taxes. These are :

  • Individuals of Monegasque nationality
  • Individuals of nationality other than French and American who are officially resident in Monaco
  • French nationals born in the Principality who have never moved their tax address to France.
  • French nationals who can prove 5 years' residence in Monaco on 31/10/1962

H2: How are inheritance and gift taxes defined?

In Monaco, where a relative is in the direct line, the tax on the inheritance or donation of property is 0%. Indeed, inheritance and gift taxes apply exclusively to property located in the Principality and differ according to the specific degree of relationship between the testator and the heir or the donor and the donee.

  • In direct line as parents and children or spouses: 0%.
  • Between brothers and sisters: 8%.
  • Between uncles, aunts, nephews and nieces: 10%.
  • Between other types of relatives: 13%.
  • Between unrelated persons: 16%.

What you need to know about stamp duty and registration fees in the Principality

Registration fees

Registration fees are levied on registration formalities concerning transfers or civil or judicial acts. The acts subject to compulsory registration and within an imperative time limit are, for example

  • Notarial acts
  • Judicial acts
  • Extra-judicial acts
  • Declaration of inheritance (wills)
  • Rental contracts
  • Sale of real estate
  • Sales of businesses

Stamp duty

Stamp duty is a tax that applies to all papers intended for civil and judicial acts and writings that can be produced in court as evidence. It serves as a means of collection for administrative formalities such as

  • Certificate of domicile,
  • Work permit,
  • Family record book,
  • Passport, etc.

Stamp duties are generally fixed, but the price may vary according to the size of the paper or the values expressed in the documents.

In conclusion, moving to Monaco could certainly have a particularly positive impact on your tax situation, not only in a private context, but also in a professional context. You will increase your income and your potential to buy a property in one of the Principality's districts.

For information on the purchase, sale, rental, management and the estimation of your property in Monaco, our team is available for further information.

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