Monegasque nationals and residents in the Principality, with the exception of French nationals, who are regulated by a 1963 Bilateral Convention between France and Monaco, are not liable for income tax.  (Basically, French nationals who took up residence in Monaco after 13 October 1957, remain subject to French income tax). 

There is no income tax in Monaco on investment income, capital gains, dividends or directors’ fees in Monaco. However, the lack of income tax for individuals only relates to activities that are carried out and persons who are genuinely established in the Principality of Monaco.

There is no wealth tax or property tax in Monaco.

Inheritance and gift tax applies only to assets that are situated in the Principality of Monaco or with situs in Monaco, regardless of the domicile, residence or nationality of the deceased person or donor (subject to the provisions of the Convention between France and Monaco of 1st April 1950). 

Rates depend on the nature of the relationship between the deceased and the heir/ donee:

• Spouse and direct beneficiary:0%
• Partners having a civil partnership:4%
• Siblings:8% 
• Uncle, aunt, nephew, niece:10%
• Other relative:13%
• Unrelated beneficiaries:16%.

Gifts by will or otherwise to certain charitable entities may be exempt from tax.

Business Profits Tax

Businesses carrying out an industrial or commercial activity and generating more than 25% of their turnover outside Monaco are subject to Business Profits Tax at 25%.

VAT

Value Added Tax (VAT) is levied on the same basis and at the same rates as in France ( 5.5% reduced rate and normal rate 20%).  The intra-Community tax regime has been applicable since 1st January 1993.

The French and Monegasque territories, including their territorial waters, constitute a customs union, as established by the Customs Convention of 18th May 1963.  The French Customs Code therefore applies in the Principality of Monaco.  Because of its customs union with France, and to ensure that this bilateral agreement is strictly applied, the Principality is included in the European Customs Territory (even though it remains a third state with regard to the European Union).  Goods and services in the Single European Market can thus be accessed from Monaco.

Stamp or registration duty is levied on all documents used for civil and legal purposes. The main duties include:

• A 1% registration duty on leases, due by the tenant and levied on the annual rent plus service charges;
• Stamp duty on the transfer of ownership of real estate. The rates vary depending on whether or not the transaction is for the benefit of persons that meet certain statutory transparency criteria. In general, purchases of real estate by non-transparent entities – such as foreign companies, trusts and other such entities – are subject to registration duties of 7.5 % on the transfer price. 
• When the purchases are made by transparent entities (eg by individuals or “civil” companies), the tax rate is reduced to 4.5 %. 
• Foreign companies and Monegasque companies considered as non-transparent owning a property in Monaco must appoint a Monegasque tax representative and file an annual statement to declare whether or not there has been a change in beneficial ownership. A change of beneficial owner (with exceptions, especially in certain direct line family transfers) requires payment of a transfer tax of 4.5% on the market value of the property.