# Monaco cross-border tax, residence and foreign credits

> **Source-cited draft.** Checked 25 October 2026. No named Monaco professional has reviewed this Guide. It produces a working paper, not a filing or a final tax position. Read the [country gap register](README.md) before use.

## Who this applies to

Tax year 2026. Use this Guide for a Monaco business receiving foreign income, operating abroad or moving its seat/establishment, and for individuals whose residence or French nationality needs treaty screening. It is an evidence and ordinary-credit working paper, not a complete treaty atlas. A Monaco residence card does not settle foreign residence, foreign-source tax, treaty entitlement or social coverage. [Arts. 1, 22–23, 29](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152); [Arts. 7, 22](https://legimonaco.mc/tai/convention/1963/05-18-tai1l000235/); [Art. 3](https://legimonaco.mc/tnc/ordonnance/1986/03-28-8.566/).

## Rates, bands and thresholds

| Item | Amount or limit | Period | Official source |
|---|---|---|---|
| Ordinary ISB | 25% | 2026 | [Art. 21](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152) |
| Foreign income tax credit | Evidenced foreign tax, against Monaco ISB on the same income | 2026 | [Art. 22](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152) |
| French-national historic exception | Five years habitual Monaco residence at 13 October 1962 | Treaty test | [Art. 7](https://legimonaco.mc/tai/convention/1963/05-18-tai1l000235/) |
| Fiscal residence principal stay | At least 183 days or longer than each other country | 2026 procedure | [Art. 3](https://legimonaco.mc/tnc/ordonnance/1986/03-28-8.566/) |

## The base

Separate three decisions. First, establish ISB scope under article 1. Second, exclude net profits **and losses** only where the foreign-operation tests in article 1(2) are met: foreign permanent establishment, habitual complete foreign cycle, or qualifying foreign representative. Third, examine foreign-source income remaining in the Monaco base for article 22 credit. A foreign customer is not itself a foreign permanent establishment. [Arts. 1–4, 22](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152).

Article 22 requires evidence of foreign income tax and gross-up of the foreign receipt by that tax. It permits credit against Monaco ISB due on the same income. Do not credit VAT, social charges, an unsupported payment or all foreign tax against unrelated Monaco profit. Article 23(1)(10) requires a statement by income type with proof of foreign tax. Article 15(2) denies article 22 credit on participation income removed under that provision. For article 15 participation relief, use the company/registered-holding, at least 20% interest and more-than-two-year acquisition holding tests in the [ISB Guide](mc-corporate-income-tax.md). The expense quota is 20% below a 35% holding, 10% from 35% to below 50%, and 5% from 50%, capped at actual total expenses. Do not both deduct the eligible income and credit its foreign tax. For each foreign refund or reduced-rate claim, obtain that source state’s operative treaty/article, beneficial-owner and residence evidence, prescribed form and deadline; a Monaco credit is not a foreign refund claim. [Arts. 15, 22–23](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152).

For individuals, French article 7 and current official French doctrine must be applied to nationality, residence history and exceptions, including continuous residence from birth and specified service/family/dual-national cases. Monaco fiscal certificates under Ordinance 8.566, and treaty certificates of domicile, are distinct. Use the [individual Guide](mc-income-tax.md) for the complete ordinary French-exception decision table, the Monaco fiscal-certificate dossier and French filing destination; use the linked French country Guide for French tax computations. Article 7 residence does not itself confer France-third-country treaty residence (official doctrine §260). [I-A-1 and I-A-2](https://bofip.impots.gouv.fr/bofip/12995-PGP.html/identifiant=BOI-INT-CVB-MCO-10-20210602); [Arts. 1–4](https://legimonaco.mc/tnc/ordonnance/1986/03-28-8.566/).

## Deadlines and filing

Ordinary ISB returns are due within three months after year end, or before 1 April next year where no year closes. Attach the foreign-income/tax evidence and reconciliation required by article 23. For cessation/transfer, article 29 requires the results declaration **in the month following the month** in which the cessation/transfer becomes effective. Do not replace that text with the ordinary annual deadline. [Arts. 23, 29](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152).

Article 29(3) treats dissolution, specified transformations, contributions, merger and transfer of the seat or an establishment abroad as cessation/transfer events, with immediate taxation of the period’s profit. Close the article 8 accounting-to-tax bridge through that date, include realised disposals and provision releases, then apply eligible losses and the specific article 10–11 reliefs. Article 10 requires a timely undertaking and reinvestment of both gain and original asset cost within three years after close; missing reinvestment brings the gain into the deadline year. Article 11’s qualifying family continuation and SAM/SCA merger relief require the specified unchanged values/carryover basis and conditions. For a cessation or total/partial business transfer, article 11 includes one half of qualifying fixed-asset gains if the event is less than five years after creation/purchase of the business, and one fifth after that period. Preserve asset costs, tax depreciation, transaction values, dates, relief undertakings and final return evidence. This is the statute’s cessation treatment; it does not establish a general fair-market-value charge on every unrealised asset, an instalment right or an automatic tax-free relocation. Use the [ISB filing procedure](mc-corporate-income-tax.md#deadlines-and-filing), with the article 29 deadline replacing the ordinary annual date. [Arts. 10–11, 29](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152).

## Penalties and interest

Ordinary ISB late declaration, payment and adjustment rules are in articles 34–37. Article 34 applies its stated fines also to article 29 defaults; article 35's conditional late-payment penalty is 3% within the first month after due date, then 1% per additional month or fraction. False residence-document declarations/use or attempt under Penal Code article 98 attract three months to one year’s imprisonment and the article 26(2) fine of EUR 2,250–9,000, or either alone. Intentional incorrect financial-account self-certification, failure to communicate circumstances changes, or intentional false changes under Law 1.445 article 4 attract one to six months’ imprisonment and the article 26(4) fine of EUR 18,000–90,000, or either alone. Financial institutions have separate reporting/diligence sanctions under Ordinance 6.208 articles 13–14-4; those are not a general personal income-tax penalty. [Law 1.445, art. 4](https://legimonaco.mc/tnc/loi/2016/12-19-1.445/); [Penal Code, arts. 26, 98](https://legimonaco.mc/code/code-penal/). No single cross-border penalty rate applies to every case. [Arts. 34–37](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152); [Art. 3](https://legimonaco.mc/tnc/ordonnance/1986/03-28-8.566/).

## Cross-border points

Create a separate source record for each other country, income class, residence/entity, beneficial owner, taxable period and agreement claimed. Verify an agreement is operative and covers this person, tax and income before applying a treaty rate or relief. This Guide supplies no generic zero withholding, no universal treaty access and no exemption for foreign activity merely invoiced from Monaco. Article 14 normal-conditions adjustments and foreign-country rules remain independent checks. [Arts. 1, 14, 22](https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152); [Convention scope and art. 7](https://legimonaco.mc/tai/convention/1963/05-18-tai1l000235/).

**Employment and social coverage.** Residence, income tax and affiliation are separate decisions. For foreign-source Monaco wages taxable in France, current BOFiP II §100 uses a contemporary income-tax advance collected by DGFiP; French working days need the separate I-F rules. For the France–Monaco convention’s covered persons, workplace affiliation is the starting point. Its telework exception keeps the single employer’s state where at least one third of weekly working time is on that employer’s premises, subject to the treaty facts. The later particular arrangement permits an initial France posting of twelve months and a separately authorised unforeseen extension of up to twelve more; do not use the superseded six-month text or an EU telework percentage. Route worker nationality, employment and posting evidence through the [payroll/social Guide](mc-payroll-social.md#cross-border-points). [BOI-IR-PAS-10-10-20, I-F and II](https://bofip.impots.gouv.fr/bofip/11242-PGP.html/identifiant=BOI-IR-PAS-10-10-20-20230706); [Social convention, arts. 2–4 and particular arrangement art. 2](https://www.cleiss.fr/pdf/conv_monaco.pdf).

**Financial-account self-certification.** Give the financial institution the actual tax-residence jurisdictions and required tax identifiers; for a new individual account the reasonable self-certification also includes the birth particulars required by Annex I section IV. Communicate changed circumstances as they occur (art. 5). For an entity, establish financial-institution versus non-financial-entity status, residence and any controlling persons. Under Annex I VIII-D(10)(a), the ordinary operating-NFE active test requires **both** passive income below 50% and passive-income-producing assets below 50% over the relevant preceding period. Other listed active categories have their own conditions; do not label every holding company active or every entity failing this one test passive. A passive NFE’s controlling persons must be identified under the Annex rules. A normal account holder does not file a financial institution’s return. Reporting financial institutions report by **30 June after the calendar year**, including the specified nil reporting and full cancel-and-replace corrections. Apply the consolidated text effective 1 January 2026; the old EU savings-interest withholding framework is not a current blanket withholding rule (art. 16). [Ordinance 6.208, arts. 2–5, 13–16 and Annex I IV–VIII](https://legimonaco.mc/tnc/ordonnance/2016/12-20-6.208/).

**Multinational groups.** Apply the EUR 750 million prior-consolidated-revenue CbCR screen, annual notification, reporter classification and EAI procedure in the [transfer-pricing Guide](mc-transfer-pricing.md#country-by-country-reporting). The retrieved minimum-tax item is expressly project 1.129, deposited 28 July 2026. Its proposed dates are not operative-law evidence. Multinational minimum-tax computations and a country-by-country treaty-rate atlas are specialist work outside this ordinary Guide; this makes no finding that an obligation or a treaty is absent. [Project record and explanatory text](https://legimonaco.mc/projet/1.129).

## Two worked examples that recompute

### Foreign income tax below the Monaco ceiling

Assume eligible foreign royalty income remains fully in the ordinary Monaco ISB base, not article 15-excluded income. Net cash EUR 9,000 and evidenced foreign income tax EUR 1,000 produce gross income EUR 10,000. With no expenses or other relief, Monaco tax on it is EUR 2,500, allowable credit EUR 1,000 and remaining Monaco tax EUR 1,500. This assumes eligibility has been established; it is not a treaty rate claim.

```oa-check
name: Eligible foreign income gross up and limited credit
inputs:
  net: 9000
  foreign_tax: 1000
steps:
  - gross: net + foreign_tax
  - monaco_before: gross * 0.25
  - credit: min(foreign_tax, monaco_before)
  - monaco_after: monaco_before - credit
expected:
  gross: 10000
  credit: 1000
  monaco_after: 1500
```

### Foreign tax exceeds the same-income Monaco amount

With the same eligibility assumptions, net cash EUR 7,000 and foreign income tax EUR 3,000 give gross EUR 10,000 and ordinary Monaco tax EUR 2,500. Credit is limited to EUR 2,500, leaving Monaco tax zero and EUR 500 not credited in this calculation. This Guide does not establish refundability or carryforward of that excess.

```oa-check
name: Foreign credit does not exceed Monaco tax on the same income
inputs:
  net: 7000
  foreign_tax: 3000
steps:
  - gross: net + foreign_tax
  - monaco_before: gross * 0.25
  - credit: min(foreign_tax, monaco_before)
  - monaco_after: monaco_before - credit
  - uncredited: foreign_tax - credit
expected:
  credit: 2500
  monaco_after: 0
  uncredited: 500
```

## Ask the client first

- What are the person/entity, nationalities, residence history and actual establishments?
- What income class, source country, payer, gross amount and foreign-tax evidence exist?
- What foreign operations, controlled dealings and participation holdings exist?
- What relocation, merger, cessation or seat/establishment transfer and dates are proposed?
- What treaty, certificates, group size and foreign reporting obligations are involved?

## Sources

| Official source and provisions read | URL | Read on |
|---|---|---|
| Ordinance 3.152, arts. 1–4, 10–15, 21–23, 29, 34–37 | https://legimonaco.mc/tnc/ordonnance/1964/03-19-3.152 | 2026-10-24 |
| France–Monaco convention, arts. 7 and 22 | https://legimonaco.mc/tai/convention/1963/05-18-tai1l000235/ | 2026-10-24 |
| BOI-INT-CVB-MCO-10, residence scope and exceptions | https://bofip.impots.gouv.fr/bofip/12995-PGP.html/identifiant=BOI-INT-CVB-MCO-10-20210602 | 2026-10-24 |
| Ordinance 8.566, arts. 1–4 | https://legimonaco.mc/tnc/ordonnance/1986/03-28-8.566/ | 2026-10-24 |
| Ordinance 6.208, arts. 2–5, 13–16 and Annex I IV–VIII; 2026 consolidated text | https://legimonaco.mc/tnc/ordonnance/2016/12-20-6.208/ | 2026-10-25 |
| Law 1.445, arts. 1–4; financial-account sanctions | https://legimonaco.mc/tnc/loi/2016/12-19-1.445/ | 2026-10-25 |
| Penal Code, arts. 26, 98 | https://legimonaco.mc/code/code-penal/ | 2026-10-25 |
| BOI-IR-PAS-10-10-20, I-F §§94–98, II §100 | https://bofip.impots.gouv.fr/bofip/11242-PGP.html/identifiant=BOI-IR-PAS-10-10-20-20230706 | 2026-10-25 |
| France–Monaco social convention, arts. 2–4 and particular arrangement art. 2 | https://www.cleiss.fr/pdf/conv_monaco.pdf | 2026-10-25 |
| Ordinance 6.713, arts. 2–15, CbCR; detailed procedure in TP Guide | https://legimonaco.mc/tnc/ordonnance/2017/12-14-6.713/ | 2026-10-25 |
| Project 1.129, record and explanatory text only | https://legimonaco.mc/projet/1.129 | 2026-10-24 |

**Not yet confirmed:** specialist treaty-rate tables and source-country refund procedures, financial-institution industry implementation and operative multinational minimum-tax calculations. No generic zero withholding, full treaty access, foreign refund or unrealised-gain/deferral treatment is asserted. The ordinary scope, credit, participation, cessation, account-holder and employment routes above apply on their stated facts.

> Contributed by Michael Cutajar.