Monaco tax: tax certificate

France

In accordance with international standards, Sovereign Ordinance 8372 of 26 November 2020 amends Sovereign Ordinance 8.566 of 28 March 1986 regulating tax certificates (Journal de Monaco of 4 December 2020). Individuals who live in Monaco may now apply, under certain conditions, for a certificate of domicile for tax purposes (“certificat à des fins de formalités fiscales”), including for the purposes of the Common Reporting Standard (CRS). This certificate may be used for five years, unless circumstances change.

1.To apply for such a certificate, any individual who lives in Monaco must proceed as follows.

a) If the individual is a citizen of Monaco

  • produce ID and evidence of residency in Monaco.

b) If the individual is a citizen of a country other than Monaco

  • provide a valid residence permit (carte de séjour) ;

  • declare, pursuant to the provisions of Article 98 of the Criminal Code, that they have their main place of residence, or their home (foyer – household), on the territory of the Principality, or that they have the principal centre of their activities in Monaco, subject to bilateral treaties and conventions;

  • justify that they occupy a dwelling in Monaco by providing a legal title, a rental agreement or a certificate of accommodation;

  • provide utilities bills (water, electricity and telephone) and any other document which may establish permanent residence;

  • provide any relevant documents that may be requested by the Monaco authorities for verification and investigation purposes.

2. Explanation of residence criteria

  • The individual may only claim to have their home (foyer) in Monaco if their principal place of residence cannot be determined.
  • The principal, or usual, place of residence corresponds to presence of at least 183 days per calendar year in the Principality or, if less than 183 days, if the applicant is physically present in Monaco for a period longer than the number of days spent in other countries.

The day of arrival and the day of departure are counted: for example, if an individual arrives in Monaco on a Thursday and leaves the following Monday, the total is 4 nights and 5 days (Thursday, Friday, Saturday, Sunday and Monday).

In practice, the tax authorities usually determine an individual’s residence for tax purposes by examining their bank account statements. The method used is as follows: a debit transaction in a State implies a day spent in that country. It is therefore up to taxpayers to keep their bank statements in order to demonstrate their presence in a given country in response to a request from the Monegasque authorities or any other foreign administration. Confidentiality can be ensured by concealing personal data and amounts, the decisive factor being the country of the debit shown on the bank statement.

  • The principal centre of activities means the place where the individual makes their principal investments, has their registered office or place of effective management of their affaires, or where they administer their assets.
  • These concepts exist in the Common Law equivalent of “Central Management and Control”. They refer to the country of effective management or where strategic decisions are taken. For example, a single Family Office in Monaco is a registered office or place of effective management.

3. Procedure

  • The application for a certificate of domicile for tax purposes must be filed in person by the individual at the Directorate of Public Security located at 8 Rue Louis Notari.
  • The certificate expires after one year from the date of issue. However, under international standards, it is valid for five years.
  • The certificate is not an obligation for taxpayers under the Common Reporting Standard in accordance with Article 2(6) of Sovereign Ordinance 6.208 of 20 December 2016. Accordingly, financial institutions may not require it as proof of residence.
  • Any inaccurate declaration falls under the scope of Article 98 of the Criminal Code (imprisonment ranging from three months to one year and/or a fine of €2,250 to €9,000).