Tax Residency in Monaco
Monaco's tax residency criteria are defined by Article 1 of its Income Tax Law (Loi n° 644 du 29 décembre 1954). According to this law, an individual is considered a tax resident if they meet any of the following conditions:
- They have their domicile in Monaco.
- They have their habitual residence in Monaco.
- They have the center of their economic interests in Monaco.
Domicile is defined as the place where an individual has their permanent home. Habitual residence is defined as the place where an individual resides for more than six months of the year. The center of economic interests is defined as the place where an individual's main business or professional activities are carried out.
These criteria are intended to ensure that individuals who have a substantial connection to Monaco are subject to taxation on their worldwide income.
Monaco has entered into a number of tax treaties with other countries, including France, Italy, and the United Kingdom. These treaties may modify or provide exceptions to the standard criteria for tax residency.
For example, the Monaco-France tax treaty provides that an individual is considered a resident of Monaco if they have their domicile in Monaco or if they have their habitual residence in Monaco for more than six months of the year. However, the treaty also provides that an individual who is considered a resident of both Monaco and France under the domestic laws of both countries will be considered a resident of France for the purposes of the treaty.
These treaty-specific modifications are intended to prevent double taxation and to ensure that individuals are taxed in the country where they have the most substantial connection.
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