How does Monaco's tax system work?

The Monegasque tax system is unique and straightforward, operating without income tax and with a low business tax, which represents a genuine advantage for individuals and foreign companies establishing themselves in the Principality.

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

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

Corporate profit tax

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

It also applies to companies that derive 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.

Holding French nationality

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

What are the tax laws for individuals in Monaco?

Individuals are exempt from all taxes on income, capital gains, or capital. This applies to:

  • persons of Monegasque nationality
  • natural persons of a nationality other than French or American officially residing in Monaco.
  • persons of French nationality born in the Principality who have never transferred their tax domicile to France.
  • French nationals able to prove 5 years of residence in Monaco as of 31/10/1962

How are inheritance and gift duties defined?

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

  • in direct line, such 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 duties and registration fees in the Principality

Registration fees

Registration fees are collected during registration formalities, relating to transfers or civil and judicial deeds. Deeds subject to mandatory registration within strict deadlines include, for example:

  • Notarial deeds
  • Judicial deeds
  • Extra-judicial deeds
  • Succession declarations (wills)
  • Rental agreements
  • Transfer of real estate
  • Business sales

Stamp duties

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

  • certificate of domicile
  • work permit
  • family record book
  • passport

Stamp duties are generally fixed, but the amount may vary depending on the size of the document or the values expressed in the deeds.

In conclusion, settling in Monaco could very certainly have a particularly positive impact on your tax situation, not only in a private context but also in a professional one. This enhances the value of your income and increases your purchasing potential for a property in one of the Principality's neighbourhoods.