Is Monaco really tax-free? What the law says, and what you'll pay as a visitor

It’s the Monaco fact everyone knows and hardly anyone explains properly. ‘You don’t pay tax in Monaco’ gets repeated everywhere, and it isn’t quite right. There are taxes, and you as a visitor will pay at least two of them. What does exist is a very old exemption for residents, with one famous exception. Here’s what the official sources actually say, minus the myths, and what really affects your trip.

Where the reputation comes from, 1869

It goes back to the 19th century. In 1869, according to IMSEE, Monaco’s residents were exempted from the land, personal and property contributions and the business licence tax, the direct taxes of the day. It came in the same years that Monte-Carlo was being born, in the 1860s. To me it’s one of the key dates in the country’s history, though I haven’t read an official explanation of the reasoning behind it, so I won’t dress it up.

Why Monaco became so wealthy has more layers, and I cover them in Monaco facts. The 1860s, the Casino and the loss of Menton and Roquebrune are in the history of Monaco. Here I’m sticking to tax.

The French exception of 1963

The exemption doesn’t apply to everyone. In 1962 relations with Paris soured badly, and on 12 October that year de Gaulle’s France put customs and police controls on the border. On 18 May 1963 new conventions were signed, including a tax one, and since then French nationals living in Monaco are taxed on the same terms as if they lived in France. A 2003 annex also applied the French wealth tax to them, according to the French Senate.

It’s a detail many people don’t know, and it rather punctures the idea that you simply move to Monaco and stop paying. For the French, you don’t, and the rule has stood for more than sixty years.

The taxes that do exist

The Monaco government’s Tax Services Directorate runs quite a long list. It oversees VAT, collects inheritance and gift duties and registration and stamp duties, and applies the tax on company profits, the ISB, created by an ordinance of 1964. It also issues tax residence certificates for people living in the country.

There’s one thing I want to be clear about, because it’s the honest position. No official page I’ve read says in so many words that non-French residents pay no income tax. It’s inferred from the 1869 exemption and the 1963 convention, but I won’t present it as a quote I haven’t seen.

Is it still a tax haven?

In the sense of banking secrecy, less and less. In 2016 Monaco ratified the OECD convention on mutual administrative assistance in tax matters, and since 2018 it has exchanged financial account information automatically with other countries, starting with 2017 data. The government itself presents this commitment to transparency as part of its foreign policy. To me that rather changes the picture of a small state hiding money from the world.

What you pay as a visitor

Here’s the practical bit. VAT is included in everything you buy, just as in France, because Monaco is part of the EU customs territory. Since Brexit, UK residents count as living outside the EU, so you can reclaim part of it, between 12% and 16% of the price, if you spend more than €100 in a single shop within three days, are 16 or over and stay less than six months. At the Métropole shopping centre the refund is paid in cash on the spot. More in money and payments in Monaco.

The other tax you’ll notice is the hotel’s tourist tax. The SBM adds €7 per adult per night on top of the room rate at both the Hôtel de Paris and the nearby Hermitage, its two grandest addresses, and €5 at the Monte-Carlo Bay. For a couple, four nights at the Hôtel de Paris adds €56 to the bill. Not much at those prices, but worth adding when you compare. All the options are in where to stay in Monaco.

My conclusion is simple. The low-tax Monaco is real for some of its residents, but it isn’t the visitor’s Monaco. You’ll pay VAT as you would anywhere and a charge for sleeping, and whatever others save won’t bring any price down for you.