We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
In the Principality of Monaco, a huge number of properties are
held through offshore special purpose vehicles to ensure both
confidentiality and tax efficiency. As a matter of fact, such
structuring allowed owners to benefit from a very tax efficient
structure to transfer Properties in Monaco.
As opposed to the then applicable Monegasque taxes and other
costs of 10% ( +/- 8% of land registry and stamp duties + 2% of
notary fees), the disposal of shares of a foreign entity owning
real estate in Monaco did not trigger any tax consequences in the
Principality of Monaco.
As a consequence, in the last decades, an always growing number
of real estate transactions in Monaco were structured through such
very simple transfer of shares with no payment of any tax, and no
communication whatsoever to the Monegasque Authorities.
At the same time, the income derived from the taxation on real
estate transactions decrease significantly and the Principality
progressively lost a huge part of its tax revenue.
Law NR 1381 Of 29 June 2011 – 4.5% Taxation For
Disposal Of Shares Of Entity Owning Real Estate In Monaco And
Annual Tax Declaration
As a consequence, last year, the Principality of Monaco tax
legislation relating to foreign entities that own real estate
property in Monaco has been substantially modified by the Law Nr
1381 of 29 June 2011, with immediate and significant
consequences.
From this very same date, the disposal of Foreign Entities
owning a property in Monaco have become taxable at 4.5% of the
asset market value and pertaining rights. This will affect a large
number of entities including companies, foundations, trusts,
certain investments funds and insurance policies.
In order to control the transactions affecting the shares of
foreign entities owning real estate property in Monaco, LAW NR 1381
OF 29 JUNE 2011 also created the obligation to appoint a qualified
Professional Agent in Monaco and to report on an annual basis any
change, if applicable, in the beneficial ownership of the corporate
structure.
The first declaration under this law must be completed and files
within the 30th of September 2012, and shall be related
to the period beginning from the 30 of June 2011.
For those who shall not comply and fail to appoint a qualified
Professional Agent in Monaco, an annual tax equal to 1.5% of the
market value of the asset and pertaining rights will be
imposed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On 18 April 2013 the UK government issued a legal challenge to the decision of the EU Council of 22 January 2013 which authorised a subset of the EU (not including the UK) to introduce a financial transaction tax.
A discussion on the changes brought by the Finance Bill in relation to the commitments to raise the Inheritance Tax and exempt limit on the value of transfers of assets to a non-UK domiciled spouse or civil partners.
Switzerland has been and is regarded as an attractive and competitive location for setting up a holding company, especially in the case of the acquisition of a company or the formation of a group of companies.
In his March 2011 Budget statement the Chancellor of the Exchequer announced consultation on the introduction of a statutory definition of tax residence.
VAT is normally accounted for by businesses on an accruals basis whereby VAT is paid to the tax authorities on invoices issued.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
