Taxation: a unique and effective system

Monaco is one of the only countries in the world that does not collect an income tax. This unique system has been proving itself to be effective since 1869.

Historically speaking, the lack of an income tax on individuals in the Principality dates back to the nineteenth century.

In 1848, at a time of revolution in Europe, the communes of Roquebrune-Cap-Martin and Menton, which were until then part of the Principality of Monaco, seceded. Having had enough of the tax burden in the Principality, the two regions became part of France. Monaco rediscovered its independence, but lost 80% of its territory and was forced to develop a new economic model.

Since the nineteenth century, Monaco has funded itself primarily through revenue from monopolies, a value-added tax set at 20% on consumption, a tax on the profits of certain companies, and transfer duties and inheritance taxes. There are no wealth taxes, property taxes or housing taxes in the Principality of Monaco.

The only direct tax collected in the Principality is a tax on profits made through industrial and commercial activities. It applies to businesses engaging in industrial or commercial activity that generate more than 25% of their turnover outside Monaco.