Understanding Monaco’s Tax Agreement with Italy: What You Need to Know
2025-05-28
Navigating Tax Agreements: What Monaco’s Deal with Italy Means for You
Welcome back to the Monaco Properties blog! Today, we’re diving into an important topic that affects many of our international clients—tax cooperation between Monaco and Italy. Whether you’re living, investing, or operating a business across both borders, understanding this agreement is essential.
Let’s take a closer look at what this bilateral agreement entails, how it works, and what it means for you as a resident, investor, or cross-border entrepreneur.
Monaco’s Global Commitment to Transparency
Monaco is internationally recognized for its secure, tax-friendly environment. At the same time, the Principality is deeply committed to global cooperation and transparency, as reflected in its extensive network of 36 bilateral tax agreements with countries including:
- France, Italy, Germany, Austria
- United Kingdom, United States, Australia, India
- Sweden, Denmark, Belgium, the Netherlands, and more.
These agreements are part of Monaco’s efforts to align with the standards of the OECD (Organisation for Economic Co-operation and Development) and reinforce its reputation as a compliant and trustworthy jurisdiction.
What Is the Monaco–Italy Tax Agreement?
The Monaco–Italy tax agreement, signed in 2015, facilitates the exchange of information on tax matters. This means that Monaco and Italy can legally share certain financial or administrative data when requested, helping each country enforce its tax laws fairly and efficiently.
This agreement is not a double taxation treaty, but rather a Tax Information Exchange Agreement (TIEA). Its purpose is to assist in:
- Assessing, collecting, and recovering taxes
- Preventing tax fraud or evasion
- Conducting investigations into potential tax offences
Taxes Covered Under the Agreement
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, the agreement applies to:
- Corporate tax (on business profits exceeding thresholds)
- Inheritance and gift duties
- Real estate transfer taxes
- Excise duties and VAT-equivalent taxes
Key Provisions of the Monaco–Italy Agreement
Here are the most relevant takeaways for those navigating cross-border life between the two countries:
Information Exchange Upon Request
- Monaco and Italy agree to exchange information only upon specific legal request.
- This can include banking data, company ownership records, trust structures, and even witness statements or certified documents.
- Requests must clearly identify the person concerned, the reason for the request, and the applicable tax law.
Confidentiality Guaranteed
All information exchanged must remain strictly confidential and may only be used for tax-related purposes. Unauthorised disclosure or use is prohibited.
No Fishing Expeditions
The agreement does not allow vague or speculative investigations. Each request must be well-documented and justified according to both countries' legal standards.
Residency Clarification
If an individual has ties to both Monaco and Italy, the agreement outlines criteria for determining official tax residency—crucial for avoiding tax conflicts.
Avoiding Double Taxation
While this is not a double taxation treaty, certain provisions help ensure that individuals are not taxed twice on the same income—particularly when residency or asset ownership is split between the two nations.
The agreement became fully effective once both Monaco and Italy completed their respective ratification procedures. It applies to matters dating from the time of signing in 2015 onward. This agreement reinforces transparency and provides a clear legal framework for cross-border taxation—helping you avoid surprises and comply with your obligations.
At Monaco Properties, many of our clients are high-net-worth individuals and investors who hold assets or ties in both countries. Knowing how this agreement works ensures:
- Peace of mind when purchasing property
- Clarity around your tax reporting obligations
- Compliance with both Italian and Monegasque regulations
Final Thoughts
The Monaco–Italy tax agreement is a modern, well-regulated framework for tax cooperation. Far from being a complication, it strengthens Monaco’s position as a credible, tax-friendly jurisdiction while offering protections to those who comply with international norms.
As always, for individual legal or tax advice, we recommend consulting with a qualified professional in Monaco or your country of tax residence.
And if you're exploring the idea of investing or relocating to Monaco, our team at Monaco Properties is here to reach out:
- Phone +377 97 97 33 97
- Whatsapp: +33 6 40 62 65 76
- Email: info@mpmonaco.com
Disclaimer: Monaco Properties is a real estate agency. We do not provide legal or tax advice. This article is for general informational purposes only and should not be interpreted as legal or financial counsel.
