One of the most attractive reasons to live in Monaco is its tax system. Monaco has no personal income tax. If you are a resident of Monaco (except for French Nationals) you do not have to pay personal income tax. Besides not having a personal income tax, there is no capital gains tax (except for French Nationals) and no inheritance tax. No inheritance tax applies only to direct heirs or spouses.

Personal Taxation

a) Income Tax:
Personal income tax was abolished in Monaco in 1869 and the only exception is French citizens who have settled in Monaco since 1 January 1957, who are subject to French tax law.

b) Inheritance Tax:
No inheritance or gift tax exists in direct line or between spouses. In other cases, the tax rate is low:
- 8% between siblings
- 10% between uncles, aunts, nieces and nephews
- 13% for other family
- 16% for unrelated persons

Rental Income

Rental properties are taxed at 1% of the annual rent plus estimated service charges. This tax is payable by the tenant.

Capital Gains

No capital gains tax, except for French residents.

Property Tax

There are generally no property taxes in Monaco;however a one-off fee of 9% from notery fees and registration duties applies.

Corporation Taxation

Monaco does not have a general corporate income tax but, under the terms of its tax treaty with France, it levies a tax on the profits of enterprises engaged in certain business activities. The following are liable to tax in Monaco:

• Enterprises carrying out commercial or industrial activities in Monaco if 25% of their company turnover results from operations outside Monaco.
• Companies whose activity in Monaco consists of collecting the proceeds of the sale or licensing of patent rights, trademarks, manufacturing processes and formulas; or literary or artistic copyrights.

Profits Tax

The current profits tax rate is 33.33%. The tax base is its annual worldwide income earned or deemed to be earned through a business in Monaco. Business expenses are normally deductible unless they are connected with foreign income, which is not taxable.

Losses on the sale of real estate can be carried forward to offset against future profits for a maximum of five years.

Other Taxes

Fiscal stamps must be obtained for all official civil and judicial acts. In addition, all documents which could be produced as evidence in a court of law must be stamped in order to be valid. Stamp costs are either a fixed fee or depend on the format of the document or the values involved in the acts. Registration duties are collected for the registration of real estate transfers or change of ownership. The most commonly applied rates are as follows:

- 1% for leases, subscription or transfer of shares in a company
- 6.5% for the sale of real estate
- 7.5% for the transfer of goodwill, clientele or real estate