Mostly sales taxes or value-added taxes, import and export duties. Like the majority of the EU, Monaco imposes a sizable 20% VAT on all purchases. VAT is referred to as TVA in Monaco; more on this later.
What Are Some Taxes Citizens of Monaco Must Pay?
There are no income taxes in Monaco, to put it briefly.
There are source deductions made for benefits like health, disability, pensions, and unemployment insurance for people who work for pay. I’m not sure if you’d classify that as a tax.
A small percentage of one’s total net worth is taken as “wealth tax” in France and many other nations, including Switzerland. There isn’t one in Monaco.
Can French People Move to Monaco and Avoid Paying the Income Tax?
By relocating to Monaco, French nationals cannot avoid paying French income taxes. However, French people are able to live and work there and do.
French neighbors reportedly said, paraphrasing:
“We object to the notion of our wealthiest and most successful French citizens relocating to Monaco. or purchasing items while avoiding taxes in Monaco.”
As a result, France passed legislation stating that French nationals who relocate to Monaco will still be required to pay French income taxes.
These Are the Main Ways Monaco Generates Revenues
Prior to Princess Grace, the Principality’s hotels and casinos known as the Societe Bains de Mer were the main source of income.
Following a close call with Monaco, France now also charges a 20% VAT (known as TVA in Monaco) on all purchases, but returns the money to Monaco. The primary source of income for Monaco at the moment is the refund of these TVA payments.
The TVA taxes paid into the Monaco treasury by France dwarf all other revenues like hotel taxes, inheritance taxes, port docking fees, corporate fees, building permits, admission to the Aquarium, Doll Museum, etc.