TLDR: Monaco does not tax individuals on their income. French residents in Monaco may be taxable in France under Article 7-1 of the Franco-Monegasque tax treaty, except in specific cases (uninterrupted residence since birth, minors, etc.).
General principle of taxation in Monaco
The Principality of Monaco does not subject individuals with their domicile in its territory to income tax. This rule applies to all residents, regardless of their nationality.
Case of French residents: taxation in France
French residents in Monaco are subject to income tax in France under the following conditions:
- They transferred their domicile or residence to Monaco after 13 October 1962;
- They cannot prove five years of habitual residence in Monaco as of 13 October 1962.
In these cases, they are taxed in France on all their income, as if they had their domicile or residence in France. Tax returns must be filed with the Menton (Alpes-Maritimes) individual tax service.
Exceptions for French residents in Monaco
Some French residents in Monaco are not taxable in France on their income, subject to conditions:
- French nationals born in France: those who immediately joined their parents' home in Monaco and have resided there without interruption, provided their stay in France was exclusively related to the circumstances of birth;
- French nationals born in Monaco: those who have continuously resided there since birth, regardless of the date;
- French minors: those with at least one parent of Monegasque or French nationality holding a certificate of domicile, and who have habitually lived in their parents' household in Monaco since birth.
These individuals must justify their status with a certificate of domicile issued by the Monegasque authorities or, failing that, by any evidence establishing their permanent and habitual residence in Monaco.
Special cases: professional activity or economic centre of interests in France
French nationals who maintain their home or principal residence in Monaco, but whose main professional activity or centre of economic interests is in France, remain taxable in France on all their income. The Monegasque certificate of domicile is then suspended in its tax effects for France.
Non-French residents in Monaco
Non-French residents in Monaco are not covered by Article 7-1 of the Franco-Monegasque tax treaty. Therefore, they are not taxable in France on their income, unless they have income from French sources (taxable under the rules applicable to non-residents).
Residents who transferred their domicile from a third country
French nationals who have transferred their domicile or residence to Monaco from a country other than France are excluded from the scope of Article 7-1 of the treaty. Therefore, they are not taxable in France on their income, except for income from French sources.