Is Monaco tax free? The short answer

Monaco residents pay zero personal income tax, no wealth tax, no capital gains tax, no annual property tax, and no municipal tax. In that narrow sense, yes, Monaco is effectively tax free for individuals.

But “tax free” as a blanket label is misleading. The Principality still levies VAT, inheritance and gift tax on Monegasque assets, real estate transfer duties, a 1% leasehold tax, a tourist tax, and corporate income tax on companies with significant foreign revenue. French nationals are also subject to a separate bilateral regime that can negate the income-tax advantage entirely.

This guide walks through what is actually 0% in Monaco, what is not, and where the practical tax burden sits for a resident.

What Monaco residents do not pay

Since 1869, Monaco has not levied personal income tax. The exemption is broad and applies to:

• Salaries and employment income
• Dividends from any source
• Interest income
• Capital gains on securities, real estate and other assets
• Director’s fees and bonuses

There is also no wealth tax, no annual property tax, and no municipal tax on residents.

The exemption applies to Monaco nationals and to foreign residents who hold both administrative residency and a Monaco tax residency certificate. The certificate is the document that lets you assert tax residency to foreign authorities, so without it the income-tax advantage is not portable.

What Monaco residents do pay

VAT at 20%

Monaco applies the same VAT regime as France due to its EU customs status. The standard rate is 20% and covers most goods and services, with the same reduced rates France applies to specific categories. There is no Monaco-specific VAT relief for residents.

Real estate transfer tax

Property transactions are not tax free. New buildings, building plots and significantly renovated properties carry the 20% VAT. Older properties not classed as “new buildings” are subject to transfer duties instead:

• 4.75% if the buyer is a private individual or a qualifying Monegasque Personal Civil Company (SCP)
• 7.5% for non-transparent structures (foreign companies, Monaco corporations, trusts) that comply with beneficial ownership disclosure
• Up to 10% for non-transparent entities that fail to provide proper beneficial ownership documentation

Notary fees are added on top.

Inheritance and gift tax

Inheritance tax applies only to assets located in Monaco, regardless of the deceased’s domicile or nationality. Rates depend on the relationship to the heir:

• Spouse and direct beneficiary: 0%
• Partners under civil union: 4%
• Sibling: 8%
• Uncle, aunt, nephew, niece: 10%
• Other relative: 13%
• Unrelated beneficiary: 16%

Gift tax applies at the same rates and only to Monaco-located assets, with exemptions for transfers to certain charitable institutions or to the Principality itself.

Leasehold tax (1%)

Tenants in Monaco pay a 1% leasehold tax on the rent of their housing. This sits with the tenant, not the landlord, so it is a real cost for anyone renting in the Principality.

Tourist tax

Since January 2024, non-resident visitors over 18 pay a contribution touristique on hotel stays. Rates run from [currency amount=”2″ cur=”EUR”] per person per night in 2-star hotels to [currency amount=”7″ cur=”EUR”] in 5-star hotels. Stays exceeding 90 consecutive days are exempt. The tax does not currently apply to short-term furnished rentals like Airbnb.

Other duties

Monaco also levies registration fees, stamp taxes, business license tax, social security contributions for employers, and excise on alcohol and tobacco. None of these are large for a private individual, but they exist.

Corporate tax: 25% over a foreign-revenue threshold

Monaco does levy corporate income tax (the Impôt sur les Bénéfices). It applies to industrial or commercial companies that generate more than 25% of their revenue outside the Principality, at a standard rate of 25%.

New companies meeting the criteria still benefit from a graduated relief scheme:

• Years 1-2: full exemption
• Year 3: 6.25% effective rate
• Year 4: 12.5% effective rate
• Year 5: 18.75% effective rate
• Year 6 onward: full 25%

Companies earning 75% or more of their revenue inside Monaco are not subject to corporate tax at all. There are no withholding taxes on dividends or interest paid by Monaco-based companies.

Read the full breakdown in our guide to Monaco corporate tax.

The hidden cost: foreign withholding tax

Personal income tax in Monaco is 0%, but Monaco’s narrow double taxation treaty network can shift the real burden up. The Principality has full DTTs in force with only ten jurisdictions: France, Guernsey, Liechtenstein, Luxembourg, Mali, Malta, Mauritius, Qatar, Saint Kitts and Nevis, and Seychelles.

For investors, that means no treaty relief on US- or Swiss-source dividends. A Monaco resident loses 30% on US dividends and 35% on Swiss dividends at source, with no recovery, while a French or UK resident pays only 15% under their respective treaties.

The “tax free” headline survives only for residents whose income comes from inside Monaco, from treaty countries, or through corporate structures. A portfolio investor with heavy US or Swiss exposure can end up with a higher effective tax burden in Monaco than in their previous home country.

Our complete guide to Monaco income tax covers this in full, including the treaty list and structuring options.

French nationals are not tax free in Monaco

Under the 1963 Franco-Monegasque tax convention, French nationals who established Monaco residency after October 13, 1957 remain subject to French income tax on worldwide income as if they still lived in France. This includes salary, dividends, interest, capital gains and business income.

Exemptions exist for French nationals who established Monaco residency before October 13, 1957, those born and continuously resident in Monaco, Monegasque nationals, spouses of Monegasque nationals, and a few other narrow cases. For everyone else with a French passport, Monaco is not a tax-free destination at all.

Is Monaco a tax haven?

Monaco was on national and international tax-haven lists for decades because of banking secrecy and lack of information sharing. That status has gone. Monaco is now rated “Compliant” by the OECD Global Forum, exchanges financial account information automatically under the CRS, and was removed from the EU’s non-cooperative jurisdictions list. Neither the OECD nor the EU classifies Monaco as a tax haven today.

The FATF placed Monaco on its grey list in June 2024 over money-laundering monitoring, with the Principality targeting an exit by January 2026. This is a separate process from tax-haven status.

For more on this distinction read is Monaco really a tax haven.

So, is Monaco tax free in practice?

For an individual whose income is salary or dividends from non-French, non-US, non-Swiss sources, and who is not a French national: yes, the effective personal income tax is 0%, plus no wealth or property tax. The remaining taxes (VAT, inheritance on Monaco assets, leasehold, transfer duties) are real but typically modest.

For a French national, an investor with heavy US/Swiss equity exposure, or a business owner with mostly foreign revenue, the picture is materially different. Monaco can still be the right answer, but the planning has to account for what is taxed elsewhere.

Thinking of Monaco?

Monaco Relocation Group has been assisting entrepreneurs, high-net-worth individuals, athletes and crypto investors with Monaco residency for years. If you want to know whether Monaco fits your specific profile, contact us at [email protected] or through our contact page.

You can also download our free report “The Definitive Guide to Living and Paying Taxes in Monaco” below for the full framework, residency requirements and lifestyle considerations.

Sources

• Official Monaco tax information
• Monaco corporate income tax
• Monaco tax agreements
• Monaco Life: Tax Obligations Guide