OECD Pillar Two : Prince's Government moves to safeguard Monaco's tax revenues

As part of its ongoing efforts to align Monegasque legislation with international standards, the Prince's Government is continuing the implementation of Pillar Two of the OECD/G20 BEPS Project in the area of corporate taxation.

To that end, the Government has submitted to the National Council a draft bill introducing a Qualified Domestic Minimum Top-up Tax (QDMTT) applicable to multinational enterprise groups, in accordance with the rules developed by the OECD.

The proposed measure introduces a 15% minimum effective tax rate for multinational enterprise groups with annual consolidated revenues exceeding €750 million.

By incorporating this internationally recognised measure into Monaco's legal framework, the Prince's Government is reaffirming its commitment to safeguarding the Principality's financial interests while preserving its competitiveness in an international tax environment that continues to evolve.

Contrary to some misconceptions, the reform does not create an additional tax burden for the multinational enterprise groups concerned. If such a measure were not implemented in the Principality, the corresponding top-up tax could instead be collected by other jurisdictions applying the Pillar Two rules in which those groups have a parent company or subsidiary.

The primary objective is therefore to safeguard Monaco's fiscal sovereignty by ensuring that tax revenues generated from economic activities carried out in the Principality remain in Monaco rather than being collected by foreign jurisdictions.

The measure will also reinforce the Principality's attractiveness. For the companies concerned, operating within an OECD-recognised framework will avoid additional administrative procedures and compliance obligations that could otherwise affect their decision to establish or maintain operations in Monaco.

This reform fully reflects the Principality's longstanding commitment to international tax transparency and fairness, as well as to implementing the standards developed within the OECD framework.