Monaco has no personal income tax except for French nationals who has to pay income tax according to French law and directly to the French government. Under some circumstances even French nationals may be exempt from income tax. These situations are as follow:
1. they have had been habitually resident in Monaco for 5 years on October 13, 1962 and they hold dual French and Monegasque nationality;
2. they are attached to the Prince’s household; or
3. they are the French spouses of foreigners residing in Monaco and the marriage took place before the January 1st, 1986.
Monaco has since long established itself as a home for the riches. One of the means to achieve this status has been a tax system with almost no taxes in combination with strict secrecy laws. Actually only French nationals pay income tax in Monaco and these taxes are paid directly to the French Government. Other nationals pay no income tax at all in Monaco.
However, like many other low-tax jurisdictions, Monaco has been put under international pressure and last year adopted international standards for banking openness and information-sharing. This adoption includes a commitment from Monaco to abide by the standards outlined under Article 26 of the organization’s Model Tax Convention, which requires the tax authorities to exchange information on request if there is probable cause to suspect tax evasion.
The following video shows not only the extraordinary life that you can enjoy in Monaco but does also highlight some of the issues that Monaco faces following the changes that are taking place on an international level regarding the openness and information-sharing with offshore and low-tax jurisdictions.
