Taxation in Monaco

As a sovereign and independent state, the Principality of Monaco is known for its particularly advantageous tax system. With exemptions and reduced rates, this system benefits both residents and businesses established in the Principality.

Personal Taxation: Benefits and Specificities

Monaco has implemented several measures in favor of its residents, offering what is often referred to as a “mild” tax system.

Property Tax and Housing Tax

There is no property tax or housing tax in Monaco. As a result, property owners and tenants are not subject to taxation on their real estate acquisitions.

Income Tax

Monegasque nationals and foreign residents of Monaco enjoy full exemption from income tax. However, French nationals who have settled in Monaco since January 1957 do not benefit from this exemption and remain subject to French income tax, except in certain specific cases. A French citizen married to a resident of Monaco may be exempt if:

• Their spouse is Monegasque;
• Their spouse is a foreigner residing in Monaco, provided the marriage took place before January 1, 1986;
• Their spouse is a French resident of Monaco who is already exempt.

It is important to note that these tax benefits apply only if the couple has lived in Monaco since their marriage.

Inheritance Tax

Inheritance tax applies to assets located in Monaco, regardless of the nationality, domicile, or residence of the deceased or donor. The tax rate depends on the relationship between the deceased and the heir, or between the donor and the beneficiary.

Corporate Taxation

Corporate Income Tax

Any business, whether industrial or commercial, that generates more than 25% of its revenue outside of Monaco is subject to corporate income tax. However, companies that derive more than 75% of their revenue from Monaco are exempt. Taxable profit is calculated after deducting allowable expenses, with a general tax rate of 33.33%.

To encourage business creation, Monaco has introduced a tax incentive scheme. Newly established companies benefit from a full income tax exemption for the first two years. After this period, a reduced tax rate applies for the following three years, as follows:

• Third year: 25% of taxable profit is taxed;
• Fourth year: 50% of taxable profit is taxed;
• Fifth year: 75% of taxable profit is taxed.

Thanks to its numerous tax advantages, the Principality of Monaco is an attractive location for various investments. The absence of property and housing taxes makes it an ideal place for real estate investors.