To date, 25 agreements to avoid double taxation of profits and tax information exchange were signed by Monaco including with the major European nations. 21 of them are ratified and in force, and negotiations are underway with fifteen states. These are the jurisdiction which has signed so far a double tax treaty with Monaco so far: Andorra, Argentina, Australia, Austria, Bahamas, Belgium, Denmark, USA, Faroe Islands, Finland, France, Greenland, Iceland, Liechtenstein, Luxembourg, Republic of Mali, Norway, the Kingdom of the Netherlands, Qatar, Saint Kitts and Nevis, San Marino, Samoa, Seychelles, Sweden.
It is important to remember that the Principality of Monaco is not listed on any black or gray list held by one of the countries with which a bilateral agreement entered into force.
The entry into force of these agreements is subject to the enactment and publication in the Journal of the Sovereign Order of Monaco.
A series of taxes are not available in Monaco: the income tax, the tax on large fortunes, the local tax, property tax, the housing tax, the tax on real estate gain. Companies producing more than 25% of their turnover outside of the Principality and companies whose business in Monaco is to collect revenue on patents or rights of literary and artistic property are subject to tax profit of 33.33%. These taxes are subject of the double tax treaties which are stipulating smaller or event exempt rates.
There are two ways the provisions are applicable to these taxes: through exemption or credit. The exemption method consists in not taxing at all the profits in the Principality of Monaco, based on the fact that is already taxed in the partner country. The second method consists in taxing the profits in Monaco but granting compensation in the country of origin for that amount.
The entities willing to take advantage from the double tax treaties provisions must deliver evidence that the taxes are already paid in the country of origin and a residency proof. These are usually certificates issued by the foreign countries’ tax authorities.
In order to avoid the tax frauds, the majority of these treaties have provisions related to the exchange of tax exchange information. According to these provisions, the tax authorities from one state can ask information related to a tax payer with residency in a country which has sign a double tax treaty with Monaco.