The Prince’s Government is pressing ahead with the implementation of Pillar Two of the OECD’s BEPS Action 1 project on corporate taxation, submitting a bill to the National Council for review as part of Monaco’s ongoing efforts to align its legal framework with international standards.
The proposed legislation would introduce a Qualified Domestic Minimum Top-up Tax, or QDMTT, in line with rules developed by the OECD. Under the measure, multinational corporate groups with consolidated annual revenue exceeding €750 million would be subject to a minimum effective tax rate of 15 percent.
The move allows the Principality to incorporate an internationally recognised standard into its legal framework, reflecting the government’s aim to protect Monaco’s financial interests and maintain its competitiveness amid a constantly evolving global tax landscape.
Contrary to some assumptions, the reform does not create a new tax burden for the multinational groups affected. Rather, if Monaco does not implement the measure itself, the equivalent top-up tax could instead be collected by other jurisdictions participating in Pillar Two where those same groups have a subsidiary or parent company based. The central issue at stake, then, is one of fiscal sovereignty, ensuring that tax revenue generated by activity within Monaco’s own territory stays with the Principality rather than flowing to foreign jurisdictions.
The measure is also expected to support Monaco’s attractiveness as a business location. For companies operating in the Principality, having a framework recognised by the OECD would spare them additional administrative procedures and compliance obligations that might otherwise complicate their presence in Monaco.
The reform reflects Monaco’s continued commitment to international tax transparency and fairness, alongside its broader adherence to standards developed through the OECD.