Monaco: a reminder that French nationals there remain taxed in France

The Prince's Government sets out the general rule: Monegasque nationals and residents of the Principality are not liable for income tax, at a rate of 0%¹. The absence of tax dates back to an ordinance issued by Prince Charles III in 1869.

The same page immediately states the exception: it covers residents of the Principality “with the exception of French nationals, who are governed by the bilateral convention of 1963 between France and Monaco”.

A French national living in Monaco therefore remains, in principle, taxable in France on all of their income, as if they had kept their domicile there.

The convention provides separate treatment for French nationals who can show habitual residence in Monaco on a continuous basis since an early date set by the text.

We do not publish this reference date or the continuity conditions laid down by the convention: they do not appear in the official extracts available to us, and their exact wording determines the outcome of a case. They must be established with an adviser before any plan is made.

The 1963 convention is the product of a dispute between France and the Principality, resolved by an agreement that, among other things, introduced the Monegasque tax on profits and made French residents subject to French tax.

It is therefore not just one technical provision among others: it is the foundation of the tax relationship between the two states, and it explicitly targets the situation most French applicants have in mind.

Its longevity — more than sixty years — also makes it one of the most stable rules in the entire landscape of tax mobility. It is not a regime liable to be closed or reopened.

For a national of another state, however, it does not apply: they fall under ordinary Monegasque law and its absence of income tax, provided they are genuinely established in the Principality.

Residents' private capital gains are not taxed — 0%² — since there is no personal income tax.

Inheritance and gift duties depend solely on the family relationship, with no progressive scale: 0%³ in the direct line and between spouses, 8%⁴ between brothers and sisters, 10%⁵ between uncles, aunts, nephews and nieces, 13%⁶ between more distant relatives and 16%⁷ between unrelated persons.

These duties follow a territorial rule: they apply to assets located in the Principality, regardless of the domicile, residence or nationality of the deceased or the donor. They are a tax on the asset, not on the person.

Finally, the tax on profits applies to industrial or commercial businesses that generate more than a quarter of their turnover outside Monaco, at a rate of more than 25%⁸ for financial years beginning on or after 1 January 2022.

1. For a French national, have the scope of the 1963 convention examined first: it determines whether the plan makes sense from a tax point of view.
2. Do not incur any housing costs before this review: it is the most costly mistake in a Monaco application.
3. Find housing in the Principality, a prerequisite and the main obstacle in the application.
4. Open an account with a local bank and obtain the certificate of financial means.
5. Apply for the tax residency certificate once the presence conditions are met, including a stay of more than 183 days⁹.

The official page sets a second limit, which does not apply only to French nationals: the absence of income tax “applies only to activities carried out and persons genuinely established in the Principality”. A purely formal residence therefore has no effect, whatever the nationality.

For a non-French national who genuinely settles there, Monaco remains a stable, safe framework with no tax on income. For a French national, it is the destination with the widest gap between reputation and legal reality — and that gap comes down to a treaty more than sixty years old.