TAX RATES > Monaco Tax Rates

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Monaco Tax Rates

Monaco Income Tax for Individuals

The Principality of Monaco does not have any direct income tax, nor land and property.


Monaco Property

Property prices are quite high in Monaco. Although property prices depend on many factors (Monegasque property prices are set by free market supply and demand), a 40 sqm apartment will generally begin at 900 000 Euro. Buying a property is very unrestrictive for foreigners.

The real estate brokerage activities are quite expensive (as pretty much everything in Monaco). There is a registration fee of 7.5% which the buyer pays, notary's fees between 1.5%-2.5% (buyer pays) and Estate Agent's Fee (3% + 20.6% VAT for buyer, 5% + 20.6% VAT for seller).

 

Monaco CoMPANY TAX

Companies do not suffer any direct company tax in Monaco on their profits. However, if more than 25% of a company's turnover is generated outside of Monaco, then the company is subject to a 33.33% company tax rate in Monaco.

Corporate Income Tax Rates in Monaco

When levied, the rate of business profits tax is 33.33%. Reduced rates apply to newly incorporated entities: a new trading entity less than 50% of whose share capital is held directly or indirectly by other companies pays a reduced rate of business profits tax on its activities for the first 5 years after its incorporation, as follows:

- 0% payable in the first 2 years;
- tax calculated on 25% of the reduced profits in the third year;
- tax calculated on 50 % of the reduced profits in the fourth year
- tax calculated on 75 % of the reduced profits in the fifth year
- tax calculated on 100 % of the reduced profits in the sixth year


Monaco Inheritance and Gift Tax

Inheritance and gift taxes are only payable by residents on assets situated in Monaco and do not apply to assets located outside the jurisdiction. Payable Monaco City tax arises on a transfer made at the time of a person's death or on a transfer made by way of inter vivos gift. Gifts located within Monaco which are left to charitable institutions or to the nation are exempt from this tax whether the transfer occurs on death or inter vivos.

The rates of tax payable depend on how close the relationship is between the donor and the donee with the general rule being that the more distant the relationship the higher the tax payable. The rates payable on transfers of property situate in Monaco whether by way of inter vivos gift or on death are as follows:
- Direct line spouses (wife, parents and children), nil;
- Brothers and Sisters, 8%;
- Uncles, Aunts, Nieces & Nephews, 10%;
- Other relatives, 13%;
- Unrelated persons, 16%.

If the deceased is a French national who had been resident in Monaco for 5 years at the time of his death then assets located in Monaco are governed by the laws of Monaco whereas assets located in France are taxed according to the principles of French tax law.

Monaco does not give tax credits for death duties, inheritance taxes and gift taxes. Thus if a person dies with assets in Monaco and tax has already been paid on the transfer of those assets by the laws of another jurisdiction Monaco will levy its own taxes if tax is payable under its own internal laws.


Social Security Contributions

Social insurance contributions payable by employers and employees are high. The employer's contribution is between 28%-40% (averaging 35%) of gross salary including benefits and the employee pays a further 10%-14% (averaging 13%).

An employee who is paid part of his wage by way of stock options which can be cashed in and sold at a future point in time may be required to pay social insurance on the value of the option at the time it is realized as if the option had been a salary.

Social insurance contributions, amounting to nearly 50% of salary, are a major disincentive to the hiring of staff and in many ways detract substantially from the advantageous income tax regime which exists in Monaco.

The Principality has concluded social security agreements with France and Italy for retirement and medical expense coverage.


Monaco Stamp Duty

Stamp Duty, Capital Transfer Tax and Registration Fees are payable on transactions evidenced by the official registration of documents in various public registries. It is mandatory to register inter vivos transfers of real estate located in the principality, the official documents of notaries and bailiffs, private agreements concerning leases, wills, agreements evidencing the sale of businesses and certain other legal and corporate documents and instruments.

The following rates of tax are payable:
- 7.5% on the registered value of a business sold;
- 7.5% of the registered value of real estate sold (which includes other associated fees);
- 3% of the value of a registered mortgage (which includes other associated fees);
- 2% of the value of a civil judgment registered;
- 5% on the sale of personal assets unless they are sold by auction in which case the tax is reduced to 2%;
- 1% on the registered value of a short term lease which value is determined according to set formulas;
- 6.5% on the registered value of a long term lease which value is determined according to set formulas.
- 0.65% on mortgage subscription fee

 

Monaco VAT (value added tax) Rates

Monaco does have a Value Added Tax (V.A.T.). The standard VAT rate is 19.6%, however on most services and products you purchase this will be only 5.5%.

V.A.T. is also applicable for property sales, but any properties over 5 years old are exempt from the tax.

There is no inheritance tax if it is to children or a spouse. For brothers and sisters it is 8%, Uncles, aunts, nieces and nephews is 10%, other relatives is 13%, and non-related person is 16%. There is also tax on the sale of alcoholic beverages.

The normal VAT rate of 19.6% is also the standard rate in France. The reduced VAT rate of 5.5% applies to water, food products, medicines, books, special equipment for handicapped people, hotel accommodation, public transport services and public entertainment services.

 

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monaco-tax

0%

0-33.33%

19.6%

Monaco
Income Tax Rate

Monaco
Corporate Tax Rate

Monaco
Sales Tax /
VAT Rate

Last Update:  Nov 2010

(This page may show previous year's tax rates. Always check last update time)

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