Monaco VAT: Rates, Registration, and Filing Rules

Value-Added Tax (VAT) is a consumption tax applied at each stage of the supply chain, from production to the point of sale. Due to the 1963 Franco-Monegasque Customs Union, Monaco does not have its own VAT system. Instead, it is integrated into the European VAT system and operates under the French VAT regime. This means the VAT rules, rates, and procedures applicable in France are mirrored in Monaco, creating a unified territory for VAT purposes.

Monaco’s VAT System and Applicable Rates

Because Monaco follows the French VAT regime, its rates are identical to those set by the French government. The system uses a tiered structure, applying different rates to various categories of goods and services. These rates are periodically reviewed and can be adjusted based on economic policy.

Standard Rate

The standard VAT rate in Monaco is 20%. This is the default rate applied to most goods and services unless a specific provision allows for a lower rate. It covers a broad range of items, including professional services, consumer electronics, vehicles, and adult clothing.

Intermediate Rate

An intermediate rate of 10% applies to a specific set of goods and services, commonly in the hospitality sector. Examples include restaurant and cafe services, take-away food, and hotel accommodations. It also extends to certain pharmaceutical products, passenger transportation, and some real estate renovation work.

Reduced Rate

A reduced rate of 5.5% is designated for necessities and culturally significant items. This category includes most food products, non-alcoholic beverages, books, and energy supplies like electricity and gas. Products and services for individuals with disabilities are also subject to this lower rate.

Super-Reduced Rate

The lowest VAT rate is the super-reduced rate of 2.1%. This rate is reserved for a narrow list of items, primarily certain essential medicines reimbursable by social security and press publications like newspapers.

Certain activities are exempt from VAT, including specific banking, financial, insurance, medical, and educational services.

VAT Registration Obligations in Monaco

The requirement to register for VAT in Monaco depends on a business’s location and annual turnover from taxable supplies.

Monegasque Businesses

For businesses established in Monaco, VAT registration is based on annual turnover. As of early 2025, the threshold is €85,000 for the supply of goods and €37,500 for the provision of services. A separate threshold of €50,000 exists for authors and performing artists.

EU Businesses

Businesses in other EU member states that engage in distance selling to consumers in Monaco must also register. If a company’s total distance sales to consumers across the EU, including Monaco, exceed a unified threshold of €10,000, it must register for VAT. This can be done through the One-Stop Shop (OSS) system in their home country.

Non-EU Businesses

A non-EU business may be required to register for VAT from its first taxable transaction in Monaco, as no registration threshold applies. This includes selling goods directly to Monegasque consumers or providing digital services. Non-EU companies are often required to appoint a fiscal representative in Monaco.

Filing VAT Returns and Making Payments

Once registered for VAT, a business must regularly file returns and remit the tax due through the French tax administration. The filing frequency depends on the company’s annual VAT liability. The standard filing period is monthly, but businesses with an annual VAT liability under €4,000 may request to file quarterly.

VAT returns are submitted electronically using French tax forms, such as the CA3 for the standard regime or the CA12 for smaller enterprises. Payment of the net VAT is due when the return is filed, which is between the 19th and 24th of the month after the reporting period.

Failure to file or pay on time results in penalties. A €15 fine is applied for failure to file, increasing to €150 after a formal notice. Late payments also incur interest at a rate of 0.20% per month on the tax due.

VAT Refund Procedures

The VAT system allows for the recovery of tax paid under certain conditions for both businesses and international visitors. For businesses, this involves reclaiming input VAT through regular tax filings. For tourists, a tax-free shopping scheme enables a refund on goods they purchase and export from the EU.

For Businesses

A VAT-registered business can reclaim the VAT paid on business-related purchases and expenses, known as an input VAT deduction. The recoverable amount is offset against the output VAT collected from customers on the periodic VAT return. If input VAT exceeds output VAT, the business has a VAT credit that can be carried forward or refunded.

For Tourists (Tax-Free Shopping)

Non-EU resident tourists can get a VAT refund on goods purchased in Monaco. To qualify, visitors must be over 16, stay in the region for less than six months, and spend more than €100.01 in one store on the same day.

At the store, the shopper must ask for a VAT refund form, also called a détaxe form. When departing the EU, the tourist presents the goods, receipts, and the form to customs for validation. Self-service PABLO kiosks are available at many airports for electronic validation.

After validation, the refund is processed, either as a cash payment at the airport or as a credit back to a credit card.