Corporate Taxation in Monaco: Practical Overview

Overview

The ISB (Impôt sur les Bénéfices), or corporate profits tax, is Monaco's main direct tax on business profits. It applies to companies, sole traders, and partnerships that meet specific turnover criteria.

Who Pays ISB

ISB applies to businesses operating in Monaco that generate 25% or more of their turnover from outside Monaco (cross-border activities). The tax applies regardless of the company's legal form (SARL, SAM, SNC, sole trader, etc.).

Full Exemption: Domestic Businesses

Businesses with 75% or more domestic turnover are fully exempt from ISB. This exemption is a cornerstone of Monaco's business environment and encourages investment in the local economy.

Tax Rate and Calculation

The standard ISB rate is 25%, aligned with the French corporate tax rate. It applies to taxable profits after permitted deductions and expenses.

For the exact treatment of any specific activity and for applicable allowances, confirm directly with:

• Direction des Services Fiscaux (Department of Tax Services)
• MonGuichet portal: monguichet.mc
• MonEntreprise: monentreprise.gouv.mc

New Enterprise Relief

Newly created Monaco companies subject to ISB benefit from a phased regime during their first years of activity. The regime typically involves a period of full or partial exemption before the standard rate applies in full. The exact profile and eligibility conditions should be confirmed with the Direction des Services Fiscaux at the time of incorporation, as the schedule is set by regulation and can evolve.

Filing and Declaration

Businesses subject to ISB must:

1. File annual tax returns with the Department of Tax Services
2. Declare via MonGuichet (online) or in person
3. Submit supporting documentation (annual accounts, profit/loss statement)
4. Meet published deadlines (typically calendar-based)

Sole traders and partnerships have specific filing requirements; consult with the tax department for your legal form.

Important Notes

• ISB applies regardless of company legal form if the turnover threshold is met
• Cross-border businesses should seek specific tax advice to understand their ISB exposure
• Exemption eligibility must be claimed and documented
• Professional accountants can assist with calculations and filings
• Changes in circumstances (turnover increases, activity changes) must be reported

Key Contacts

Note: This page is an informational resource based on official Monaco sources and does not replace professional legal, tax, or accounting advice.