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

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

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

This exception is the central point of any French consideration of Monaco, and it is very widely glossed over in commercial presentations.

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

The treaty provides separate treatment for French nationals who can show habitual residence in Monaco on a continuous basis since a long-past date set by the treaty.

The rule applies only to French nationals. A national of another state who genuinely settles in Monaco falls under ordinary Monegasque law and its absence of income tax.

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: 0%³ in the direct line and between spouses, 8%⁴ between siblings, 10%⁵ between uncles, aunts, nephews and nieces, 13%⁶ between more distant relatives and 16%⁷ between unrelated persons.

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

Finally, profits tax applies to companies generating 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.

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. The Monegasque tax residence certificate is issued to foreigners holding a valid permit who reside there for more than 183 days⁹, have their main activity there or spend most of the year there.

Housing is also the most restrictive condition for settling. In a territory of two square kilometres, it is the scarce resource, and its cost is the real price of entry.

We do not publish the reference date or the continuity conditions set by the 1963 treaty: they do not appear in the official extracts available to us, and their exact wording determines the outcome of a case.

1. For a French national, first have the scope of the 1963 treaty examined.
2. Do not commit to housing costs before this review: it is the most expensive mistake.
3. For a non-French national, document genuine establishment in the Principality.
4. Plan ahead for the housing condition, the prerequisite and main obstacle of the application.
5. Apply for the tax residence certificate once the presence conditions are met.

Monaco is the destination where the gap between reputation and legal reality is greatest for a French national. The regime is genuinely favourable, but it was explicitly closed to them by a treaty more than sixty years old, whose very existence is often unknown to applicants.