Monaco Income Tax: The Complete Guide to Zero Personal Income Tax

Does Monaco Have Income Tax?

Monaco has no personal income tax for residents. This applies to all income types including salaries, dividends, capital gains, and investment returns.

The principality abolished personal income tax in 1869 under Prince Charles III. Faced with the loss of agricultural land and revenue, the Prince created a new economic model centered on aristocratic tourism, building the Casino, Opera, and luxury hotels to replace traditional tax income.

The French Citizen Exception

French nationals living in Monaco are subject to French income tax. The 1963 Franco-Monegasque bilateral convention requires French citizens domiciled in Monaco since October 13, 1957 to pay French income tax on all worldwide income as if they were resident in France.

However, several exceptions exist:

French nationals resident in Monaco for over five years as of October 13, 1962 who maintained continuous residence qualify as privileged French citizens
Enfants du Pays born in Monaco with continuous residence since birth are exempt regardless of birth date
French nationals married to foreign nationals before January 1, 1986
French citizens with dual nationality who moved to Monaco before December 29, 1995

Monaco Income Tax Rate

The Monaco income tax rate for non-French residents is zero percent. This has been the case since 1869 and remains unchanged in 2026.

French citizens pay French income tax rates ranging from 0% to 45% based on progressive brackets, plus social contributions of approximately 17.2% on investment income.

What Taxes Do Exist in Monaco?

While Monaco has no personal income tax, residents and businesses do face other taxes.

Value Added Tax

VAT in Monaco mirrors French rates and applies to goods and services:

Standard rate: 20%
Reduced rate: 10% for hospitality and transport
Lower rate: 5.5% for unprocessed foods
Super-reduced rate: 2.1% for medicines and specific publications

Corporate Income Tax

Companies generating 25% or more of revenue outside Monaco pay 25% corporate tax. Companies earning 75% or more of revenue within Monaco are exempt.

New businesses benefit from graduated rates:

Years 1-2: 0%
Year 3: 6.25%
Year 4: 12.5%
Year 5: 18.75%
Year 6 onwards: 25%

Social Security Contributions

Employers and employees pay mandatory social security contributions. Employers contribute 28% to 40% of gross salary depending on the fund and salary level.

Employees contribute 10% to 14% of gross salary. Total combined social charges typically reach 40% to 42% of gross wages.

Stamp Duty

Transfer duties apply to various transactions:

Property sales to individuals: 4.55%
Property sales through companies: 6.5%
Rental agreements: 1% of annual rent plus charges
Art sales: 5% (reduced to 2% for public auctions)

Monaco Salary Tax

Monaco salary tax for non-French residents is zero. Your employer will deduct social security contributions of 10% to 14%, but no income tax is withheld.

French citizens working in Monaco have French income tax withheld at source through the prélèvement à la source system implemented in 2019.

Taxes Monaco Does Not Have

Monaco has no wealth tax, no property tax, and no capital gains tax for individuals. There is no inheritance tax for direct descendants or spouses.

Inheritance tax applies to other beneficiaries at rates from 8% to 16% based on relationship and amount.

Why Monaco Has No Income Tax

Monaco funds government operations through alternative revenue sources established after the 1869 abolition of income tax. These include monopolies, VAT revenue, corporate taxes on internationally-focused businesses, stamp duties, and casino revenues.

The no-income-tax policy attracts high-net-worth individuals and businesses. This brings economic activity and spending that generates sufficient government revenue through consumption taxes and fees.

Monaco Personal Income Tax Summary

Monaco has no personal income tax for residents except French citizens subject to the 1963 bilateral convention. The principality generates revenue through VAT, corporate taxes on certain businesses, social contributions, and stamp duties.

For non-French residents, Monaco offers a unique tax environment with zero taxation on earned income, investment returns, capital gains, and wealth accumulation.

Monaco has no personal income tax since 1869 under Prince Charles III

Monaco Government - Tax in Monaco·Last checked: 09/02/26

1963 Franco-Monegasque bilateral convention taxing French nationals

Monaco Government - Department of Tax Services·Last checked: 09/02/26

Corporate income tax (ISB) at 25% for companies with 25%+ external revenue

Monaco Government - Business Tax·Last checked: 09/02/26

VAT rates aligned with France: 20%, 10%, 5.5%, 2.1%

Monaco Government - Law and Taxation·Last checked: 09/02/26

Social security contributions funded by employers and employees

Caisses Sociales de Monaco·Last checked: 09/02/26

No wealth tax, property tax, or capital gains tax for individuals

ICAEW - Tax in Monaco·Last checked: 09/02/26

Marc Cantavella

Manager at The Global Wealth

International Tax Lawyer and HNWI Relocation Expert. Co-founder and Manager at The Global Wealth.