Tax laws Monaco
Monaco is renowned for its favorable tax environment, which has attracted affluent individuals and businesses worldwide. The Principality offers several tax advantages, including the absence of personal income tax for residents (with exceptions), low business taxes, and a relatively high value-added tax (VAT) rate.
1. Personal Income Tax:
General Rule: Monaco does not impose personal income tax on individuals residing within its territory.
Exceptions: French citizens residing in Monaco are still subject to French income and wealth taxes due to a bilateral agreement between Monaco and France.
2. Corporate Income Tax:
Standard Rate: Monaco imposes a corporate income tax rate of 33.33% on profits.
Reduced Rate: A reduced rate of 0% applies if at least 75% of a company's turnover is generated within Monaco.
3. Value-Added Tax (VAT):
- Rate: Monaco applies a VAT rate of 20% on goods and services, aligning with the standard rate of neighboring European Union countries.
4. Social Security Contributions:
Employer Contributions: Employers contribute between 28% and 40% (averaging 35%) of an employee's gross salary, including benefits.
Employee Contributions: Employees are required to pay social security contributions ranging from 10% to 14% (averaging 13%) of their gross salary.
5. Real Estate and Residency:
- Monaco's status as a tax haven has led to extremely high real estate prices, with property values reaching up to €100,000 ($116,374) per square meter in 2018.
6. International Relations and Compliance:
- Monaco has taken steps to align with international standards on financial transparency and anti-money laundering measures. In June 2024, the Financial Action Task Force (FATF) added Monaco to its "grey list," indicating the need for increased monitoring due to concerns about money laundering and terrorist financing.
Note: Tax laws and regulations are subject to change. For the most current information, it is advisable to consult official Monaco tax authorities or seek professional tax advice.
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