Monaco, aiming to align with international standards of tax transparency and cooperation, has undertaken major reforms in recent years. As part of this effort, the Principality joined the global movement against tax evasion, particularly through OECD-led initiatives.
This transition reflects Monaco’s broader objective of complying with global expectations and reinforcing its position as a transparent and trustworthy financial center.
On March 2, 2015, Monaco and Italy signed a Tax Information Exchange Agreement (TIEA), including a memorandum of understanding. The agreement was made enforceable in Monaco through Sovereign Ordinance No. 6,335 on April 5, 2017, and published in the Official Gazette of Monaco on April 7, 2017. The mechanism applies to any tax event or transaction that occurred on or after March 2, 2015.
This bilateral treaty reflects a key milestone in Italy–Monaco tax cooperation, with implications for individuals, companies, and international investors operating in both countries.
The agreement allows for the exchange of information upon request, concerning specific taxpayers.
The shared information aims to support:
The assessment, determination and collection of taxes
The recovery of tax claims
Tax investigations or prosecutions
The agreement enhances Monaco’s international reputation by enabling cross-border data sharing in line with OECD standards. It also provides legal and financial clarity for high-net-worth individuals (HNWIs) relocating to or investing in Monaco.
This is not a double taxation treaty, but rather a framework for enhanced tax cooperation.
For Italy, the agreement applies to:
Personal income tax (IRPEF)
Corporate income tax (IRES)
Regional tax on productive activities (IRAP)
Inheritance tax
Gift tax
Substitute taxes
For Monaco, it covers:
Corporate tax (for companies exceeding specific thresholds)
Inheritance and gift taxes
Real estate transfer duties
Excise duties and taxes similar to VAT
This scope is especially relevant for cross-border individuals or companies seeking to understand the Monaco tax system and its interaction with Italian tax law.
The agreement includes provisions to prevent double taxation, notably through cross-deduction mechanisms for taxes paid in the other country.
It also defines criteria for tax residency of individuals who could potentially fall under the jurisdiction of both states (e.g., permanent residence, center of vital interests, nationality, etc.).
This is crucial for those evaluating the tax benefits of moving to Monaco or structuring cross-border income streams, especially Italian citizens with ties to the Principality.
The signing of this agreement marks a key step in Prince Albert II’s roadmap toward greater transparency and international cooperation, initiated in 2009.
It also underscores Monaco's commitment to exiting any "grey list" status, by strengthening trust-based relations with European partners.
This reinforces Monaco’s image as a stable and compliant jurisdiction for international investors and institutions.