No income tax for individuals, with one major exception
Residents of Monaco, whether Monegasque or foreign, pay no personal income tax. This exemption is not new; it dates back more than a century and remains one of the pillars of the Principality's appeal. There is, however, one major exception: French nationals remain taxable in France on their income, regardless of how long they have resided in Monaco, under the 1963 Franco-Monegasque tax convention. Only French citizens already settled in the Principality before 13 October 1962, or born and continuously resident in Monaco since birth, escape this rule. For every other nationality, the absence of income tax applies fully as soon as residency is obtained.
No wealth-related taxation
Monaco levies no wealth tax, no local residence tax, and no property tax. Owning a property in Monaco therefore triggers no annual tax simply by virtue of holding it, unlike what property owners experience in France or the UK. This is a point that genuinely affects the real cost of owning a property in Monaco over time, beyond the purchase price itself.
Corporate taxation: the profits tax
Companies based in Monaco are not exempt from tax as a matter of principle. The Impôt sur les Bénéfices (ISB, profits tax) applies to businesses carrying out an industrial or commercial activity that generate more than 25% of their turnover outside Monaco, as well as to companies earning income from intellectual property. The rate stands at 25%, close to the European average. Newly created companies, however, benefit from a progressive regime: full exemption for the first two years, followed by a gradual increase up to the fifth year of activity. There is also no withholding tax on dividends or interest paid by a Monaco company, a genuine advantage when structuring a group.
VAT, aligned with the French system
Contrary to a common assumption, Monaco is not exempt from VAT. Since the 1963 customs agreement, the Principality applies the same rates and rules as France: 20% as the standard rate, with reduced rates of 10% and 5.5% depending on the category of goods or services. This VAT applies in particular to real estate transactions involving new or substantially renovated properties, as well as building land. Companies based in Monaco follow the same filing calendar as in France, with dedicated online services for declarations and payment.
Property and inheritance: two separate tax regimes
Buying and transferring property in Monaco follow specific rules, separate from everyday taxation: registration duties apply to a purchase, at rates that vary according to the buyer's profile, and inheritance tax applies according to the family relationship between the deceased and the heir, with a full exemption in the direct line. Both subjects deserve dedicated coverage, which we go into in our articles on acquisition costs and inheritance tax in Monaco.
Real tax transparency, not banking secrecy
The image of Monaco as an opaque tax haven no longer reflects reality and hasn't for some years. Monaco banks identify accounts held by non-residents and report this information annually to the Monaco tax authority, which in turn shares it with tax authorities in more than eighty countries as part of automatic information exchange. A Monaco account is therefore no longer a way to hide income from another country's tax authority: Monaco's tax system rests on a legal framework, not on secrecy.
How we help
Taxation is one of the reasons people choose to settle in Monaco, but it should never be the only factor in the decision, nor should it be approached without advice from a professional familiar with your personal situation. Our team connects you with Monaco-based accountants and tax advisors to clarify your situation before making any commitment. Considering moving to or investing in Monaco and want a clearer picture of the tax side? Let's talk.
