Monaco is an independent sovereign state, the current head of state being HSH Prince Albert II. As a consequence, the Principality legislates internally on virtually all matters (with some exceptions - banking and insurance), including direct taxation.
Monaco is not a member of the European Union and so is not directly subject to European directives and regulations.
Monaco forms part of the EU Customs Zone (hence the lack of border controls with neighbouring EU countries) by virtue of a customs treaty with France: VAT thus applies in Monaco and indeed is Monaco’s primary source of revenue.
Monaco is independent of any other EU fiscal policy, whether introduced at member state level or (at some future date) on some pan-European basis.
Monaco also forms part of the Eurozone, making the Euro the local currency.