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Monaco – Taxation

Monaco has a unique taxation system that is based on a combination of direct and indirect taxes. The system is designed to attract wealthy individuals and businesses to the country. The tax system in Monaco is administered by the Department of Tax Services.

Double Taxation Agreements

Monaco has signed double taxation agreements with several countries, including France, the United States, and the United Kingdom. These agreements aim to avoid double taxation on income earned in both Monaco and the other country. They also provide relief from withholding taxes on dividends, interest, and royalties.

Main Taxes for Expats

Personal Income Tax

Monaco does not have a personal income tax for residents. However, residents are subject to social contributions, which are paid on a sliding scale based on income. The social contributions rate for employees is 9.40%, and the rate for self-employed individuals is 15.80%.

Business Taxes

Monaco has a corporate tax rate of 33.33%. However, businesses in Monaco are subject to a minimum tax of €1,000 per year, regardless of their profits.

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Value Added Tax

Value Added Tax (VAT) is a tax on the sale of goods and services in Monaco. The standard rate of VAT is 20%.

Special Tax Breaks for Expats

Non-Domiciled Status

Expats who are resident in Monaco but do not have a domicile in the country may be eligible for non-domiciled status. This status provides a number of tax advantages, including exemption from income tax on income earned outside of Monaco.

Real Estate Tax

Expats who own real estate in Monaco may be eligible for a tax break. The tax break is available for properties that are the primary residence of the owner and have been owned for at least five years. The tax break is equivalent to 50% of the annual tax on the property.

Filing a Tax Return in Monaco

Expats who are resident in Monaco for tax purposes are required to file a tax return each year. The tax return must be filed by March 31st of the following year.

Expats can file their tax returns online using the Department of Tax Services’ online portal. To do so, they need to obtain a digital certificate, which can be obtained through the Department’s website.

When filing a tax return, expats need to provide details of their income, deductions, and credits for the relevant tax year. If they have any foreign income or assets, they may also need to declare them on their tax return.

Tax Exit Procedures

Expats who are leaving Monaco to move abroad need to follow certain tax exit procedures. Firstly, they need to notify the Department of Tax Services of their departure and provide details of their new address abroad. They should also settle any outstanding tax liabilities before leaving Monaco.

Expats who have paid tax in Monaco may be entitled to claim a refund of some of the tax they have paid. To do so, they need to file a tax return for the relevant tax year and claim the refund through the normal tax refund process.

The taxation system in Monaco is designed to attract wealthy individuals and businesses to the country. Expats in Monaco need to be aware of the main taxes that apply to them, such as social contributions, corporate tax, and value-added tax, as well as any special tax breaks that may be available. They also need to ensure they file their tax returns on time and follow the tax exit procedures if they are leaving Monaco to move abroad. By understanding the Monacan tax system, expats can ensure they are complying with their tax obligations and maximizing any tax benefits available to them.

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