Monaco and the European Union agreed on mutual introduction of automatic tax information exchange, the principality will share the information of the bank account holders to the national tax authority of their tax residence.
Monaco sends the following personal and financial information under the OECD standards to the tax offices: the bank account holder’s name, address, their tax identification number, corresponding bank account information and also the balances. In the case of foreign bank account holders the tiny South European nation will share their date of birth as well.
The official signing of the agreement will take place later, because they have to verify, that the agreement officially complies with all related G20 and OECD standards. According to the statement of the European Union, the community is pleased to note that the information flow between financial institutes and tax authorities simplifies the fight against the tax fraud and deter those who want to hide their income and their wealth abroad.
Pierre Moscovici, Commissioner for economic and financial affairs, taxation and customs of the EU said: “We both aim to combat fraud for the benefit of honest taxpayers. This agreement is a step forward in achieving our aim in an efficient and fair manner”.
A growing number of “low-tax” countries sign the automatic exchange of tax information (AEoI) agreements with the European Union, before Monaco, Switzerland, San marino, Liechtenstein and Andorra have already joined.
The main advantage of for the tax planners is that they abolished the personal income tax, the capital gains tax and the withholding tax in 1869. Inheritance and gift taxes must be paid only if the transfer of the asset is in Monaco. Because of the principality’s contract with France, Monaco is a member of the Schengen Zone, so citizens of the EU member states can travel freely there and they can even open bank accounts. If someone plans to pay the taxes in Monaco, there are several options to do so, through:
– Starting a business (forming a company)
– Rent an apartment and proof the wealth of EUR 500,000.
Companies registered in Monaco pay 33,33% corporate tax on profits if more than a quarter of their revenue is derived from foreign activities.
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