FAQ on automatic exchange of information for tax matters

This FAQ will be updated as progress is made and the situation evolves.

Background Information

Monaco is engaged in the OECD Convention on Mutual Administrative Assistance in Tax Matters the aim of which is to increase the exchange of tax information between countries, specifically on demand and automatically, in order to better combat tax evasion and tax fraud.

More than 120 jurisdictions participate in the Convention, including all the G20 countries, all the OECD countries, the leading financial centres and a growing number of developing countries.

Out of these jurisdictions, the Convention has now entered into force in a hundred countries, including Monaco.
This Convention, which was signed on 13 October 2014 by the Minister of Foreign Affairs and Cooperation, Mr. José Badia, took effect in Monaco three months after its ratification.

As a reminder, the Principality of Monaco is committed to implementing the automatic exchange of information on financial accounts; exchanges will begin in 2018 of information collected in 2017.

Furthermore, Monaco is one of the signatories of the Multilateral Competent Authority Agreement for the Automatic Exchange of Financial Account Information, which clarifies the Convention and will take effect at the same time.

Additionally, the "common reporting standard" provides that tax administrations collect from financial institutions information concerning the accounts of their clients who are non-resident in the Principality and transmit it automatically to the tax authorities of their State of residence, preserving the rights of taxpayers while guaranteeing the confidential treatment of their exchanged data.

The Amending Protocol of the "Agreement between the European Community and the Principality of Monaco providing equivalent measures to those of the Council Directive 2003/48/CE"

The Minister of State, Mr. Serge Telle, accompanied by the Minister of Finance and Economy, Mr. Jean Castellini, the current President of the Council of the European Union, Mr. Peter Kazimir, and European Commissioner for Economic and Financial Affairs, Taxation and Customs, Mr. Pierre Moscovici, signed the Amending Protocol "Agreement between the European Community and the Principality of Monaco providing equivalent measures to those of the Council Directive 2003/48/CE” (the Protocol), on 12 July 2016 in Brussels.

Following the vote on Tuesday 29 November 2016 at the Public Session on the Law approving ratification by the National Council, the instrument of ratification of the Protocol, signed by H.S.H. Prince Albert II of Monaco, was deposited with the General Secretariat of the Council of the European Union on 9 December 2016.

Thus, this Protocol repeals and replaces the 2005 agreement between Monaco and the EU on the taxation of savings and brings the new Agreement into line with the common reporting standard, in order to enable automatic exchange of information between EU member states and Monaco.

For the Principality of Monaco, this signature is part of an ongoing process of transparency and is a further example of international anti-fraud tax policy, as part of the commitment made to reach agreements on the exchange of information that respects the international standards developed by both the European Union and the Global Forum of the OECD.

The entry into force of the protocol, on the 1st of January 2017, launches the begining of a new phase – as from 2018 (and all the subsequent years, in the nine months that follow the end of the calendar year to which it relates), Monaco will exchange information automatically on an annual basis with each of the Member States, with regard to their respective residents, on each Reportable Account in Monaco and, in the case of Monaco, on each Reportable Account of a Member state.

Monaco and the member States will also be able to exchange, on request, information that is likely to be relevant for the application of the provisions of the Agreement, following the same procedure as that already applied on the basis of existing OECD bilateral agreements.

All these commitments undertaken by the Principality of Monaco follow on from the wish expressed by H.S.H. Prince Albert II to increase transparency in tax matters, and all the measures implemented since 2009.

General questions

Since his accession speech in 2005, H.S.H. Prince Albert II has confirmed Monaco’s determination to increase transparency with regard to tax matters. To this end, since 2009 Monaco has been committed to concluding agreements, which meet the standards developed by the OECD. The country has continued to make progress in strengthening the efforts to combat tax evasion and fraud implemented by the OECD World Forum and the European Union.

At the OECD World Forum on 5 November 2013, the Principality announced its commitment to signing the Multilateral Convention (MAAC), the legal basis for Automatic Exchange of Information (AoEI). Monaco signed the agreement on 13 October 2014.
In addition to the Multilateral Convention, the OECD World Forum established a new document, the Multilateral Competent Authority Agreement (MCAA), designed to facilitate automatic exchange between signatories. With a view to becoming part of the movement towards strengthening international cooperation on tax matters and demonstrating the country’s willingness to comply with the leading international standards in this area, Monaco signed this Agreement on 15 December 2015.

At the European level, Monaco signed the Amending Protocol to the "Agreement between the European Community and the Principality of Monaco providing equivalent measures to those of the Council Directive 2003/48/CE" on 12 July 2016. This Protocol repeals and replaces the 2005 agreement between Monaco and the EU on the taxation of savings and brings the new Agreement into line with the Common Reporting Standard, in order to enable automatic exchange of information between EU member states and Monaco.

Following the ratification of the three above-mentioned agreements and conventions (the MAAC, the MCAA and the EU Protocol) in December 2016, automatic exchange of information entered into force in Monaco on 1 January 2017. Monaco undertook its first automatic exchange of information with the participating jurisdictions in 2018, based on information from the year 2017.

In addition to the Multilateral Convention, the OECD World Forum established a new document, the Multilateral Competent Authority Agreement (MCAA), designed to facilitate automatic exchange between signatories. With a view to becoming part of the movement towards strengthening international cooperation on tax matters and demonstrating the country’s willingness to comply with the leading international standards in this area, Monaco signed this Agreement on 15 December 2015.

Residents of Monaco only:

No information regarding your accounts held in Monaco will be exchanged; as part of automatic exchange of information
Monaco will receive information about any accounts you hold in countries participating in automatic exchange of information with Monaco ("reportable jurisdictions"). This data may be used for income tax purposes and will be subject to a statutory period of limitation. During this period, the data will be stored under optimal security conditions, which meet the highest international standards. The IT system has been deemed compliant by the OECD after their security audit

Residents of a state with which Monaco has agreed to exchange information:

Information about any financial accounts you hold in Monaco (see question about reportable financial accounts) will be sent to the tax authorities of your country or countries of residence

Reportable jurisdictions are defined by Ministerial Decree and include:

The member states of the European Union (EU) and Gibraltar, as part of the Amending Protocol to the "Agreement between the European Community and the Principality of Monaco providing equivalent measures to those of the Council Directive 2003/48/CE" negotiated between Monaco and the EU
Jurisdictions which have signed the Multilateral Competent Authority Agreement (MCAA) for the Automatic Exchange of Financial Account Information, relating to the automatic exchange of financial account information and with which the Principality of Monaco has agreed to exchange information automatically

The list of reportable jurisdictions, is published by Ministerial Decree and updated whenever new jurisdictions are deemed reportable. There are currently 83 reportable jurisdictions (last updated by Ministerial Decree 2023-776 of 26/12/2023).

Previous Ministerial Decrees:

Since Ministerial Decree No. 2023-776 of 26 December 2023, partner jurisdictions are those which have agreed to provide reports to Monaco.

The following applies:

A partner jurisdiction included on the list of reportable jurisdictions is a reciprocal jurisdiction (i.e., one that sends and receives reports to/from Monaco)
A partner jurisdiction not included in the list of reportable jurisdictions is a non-reciprocal jurisdiction (i.e., one that sends reports to Monaco but does not receive any in return)

The purpose of the list of partner jurisdictions is to enable Monegasque financial institutions to apply streamlined due diligence procedures for clients residing in these jurisdictions.

The list of partner jurisdictions is published by Ministerial Decree and updated when new jurisdictions enter into partnership. There are currently 94 partner jurisdictions, 11 of which are non-reciprocal (latest update: Ministerial Decree No. 2023-776 of 26 December 2023).

The following types of information are exchanged as part of the Common Reporting Standard for all reportable accounts:

Name, address, tax identification number (TIN), date and place of birth [1] (in the case of an individual)
Account number
Name and identifying number of the reporting financial institution

Depending on the type of account, other financial information should be reported:

Type of account	Information required
All accounts	The balance or value entered in the account at the end of the relevant calendar year or, if the account was closed during the year, information that the account was closed
Custodial accounts	The balance or value entered in the account at the end of the relevant calendar year or, if the account was closed during the year, information that the account was closed The total gross amount of interest, dividends and other income generated with respect to the assets held in the account, paid or credited to the account during the calendar year The total gross proceeds from the sale or redemption of financial assets paid or credited to the account during the calendar year, with respect to which the reporting financial institution acted as a custodian, broker, nominee or agent for the account holder
Deposit accounts	The balance or value entered in the account at the end of the relevant calendar year or, if the account was closed during the year, information that the account was closed at the time the account is closed The total gross amount of interest amount paid or credited to the account during the calendar year
Other accounts	The total gross amount paid or credited to the account holder during the calendar year, with respect to which the reporting financial institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the account holder during the calendar year

Data is exchanged in accordance with the applicable legal provisions relating to confidentiality and the protection of personal data.

The exchange of data between financial institutions and the Administration for the purposes of automatic exchange is achieved through the provision of secure, point-to-point communications.

The exchange of data between the Administration and the OECD is carried out via the OECD’s centralised secure platform, Common Transmission System (CTS).

What documentation should financial institutions resident in Monaco consult when implementing automatic exchange?

The legislation below applies to the implementation of automatic exchange of information

In addition to the texts noted above, the Government has worked with professionals to develop a practical guide more specifically aimed at all Monegasque financial institutions to help them implement the exchange process within their organisations. This guide outlines specific aspects of the Common Reporting Standard, including the terms and conditions.

No, the Principality does not provide tax identification numbers.

Yes. In these circumstances, reporting financial institutions will need to report the information collected to each jurisdiction in which the account holder (individual or manager of an entity) is a tax resident. In this context, a Monaco resident may be a reportable person if he or she is also resident in another reportable jurisdiction for Monaco.

The Monegasque financial institutions must apply the wider approach with respect to due diligence (not reporting).

The wider approach involves applying due diligence procedures to all financial accounts opened with reporting Monegasque financial institutions.

The advantage of the wider approach for due diligence procedures is that it means that financial institutions do not have to review their classifications and collect new information if a foreign jurisdiction becomes a reportable jurisdiction.

Monegasque financial institutions are responsible for identifying reportable financial accounts. Only reportable accounts need to be reported to the Monegasque authorities

In terms of implementation, the Common Reporting Standard leaves a series of options to the discretion of each jurisdiction. Some of these options are closed due to the fact that Monaco has signed the EU Protocol, which aims to achieve a degree of homogeneity between signatories. The Principality of Monaco has decided to leave the other options open in order to facilitate the work of Monegasque financial institutions and offer them some flexibility.

Monegasque financial institutions can:

Engage service providers to discharge their reporting and due diligence obligations
Apply the due diligence procedures for new accounts to pre-existing accounts
Apply to lower value accounts (<USD 1 million) the due diligence procedures for higher value accounts (>USD 1 million)
Apply the residence address test or electronic indicia search of files held to pre-existing lower value accounts held by individual account holders
Opt not to review, identify and report pre-existing entity accounts with a an aggregate account balance or value of USD 250,000 or less
Apply the alternative procedure for group cash value insurance contracts or group annuity contracts
Use existing standardised industry coding systems for the due diligence process
Use the thresholds stated in dollars in the CRS (thresholds have been converted into euros in Monegasque legislation)
Apply the expanded definition of pre-existing accounts
Apply the expanded definition of related entities
Report the discretionary beneficiaries of a trust which is a passive non-financial entity only in years in which they receive a distribution

Monegasque financial institutions are obliged to:

File nil returns

Monegasque financial institutions are not authorised to:

Use the alternative approach to calculating account balances
Use an alternative reporting period
Gradually phase in reporting of gross sale proceeds
Apply grandfathering rules for bearer shares issued by exempt collective investment vehicles

Pursuant to Act no. 1.445 of 19 December 2016 and Sovereign Ordinance no. 6.208 of 20 December 2016, reporting Monegasque financial institutions that do not complete their declarations and due diligence obligations or make incomplete or inaccurate statements are liable to administrative and criminal penalties.

Pursuant to Act no. 1.445 of 19 December 2016, individuals who intentionally communicate incomplete or incorrect self-certification to a financial institution or do not communicate a change in circumstances are liable to criminal penalties.

Financial institutions

Financial institutions, which have a reporting obligation, include not only banks and custodians, but also certain TCSPs (Trust & Corporate Services Providers), collective investment vehicles and other legal structures whose income is derived from financial assets. Retirement funds and public pension funds are exempt from reporting obligations.

All Monegasque entities that meet the criteria of a Reporting Financial Institution must register on the EAI Portal (eai.gouv.mc).

Management companies are, by virtue of their activities, reportable financial institutions. However, since they do not,as a rule, have any accounts to report, they are exempt from reporting obligations.

In accordance with the Common Reporting Standard, a trust may fall under various categories of entity, depending on the nature of its activities.

Classification of trust	Financial institution	Active non-financial entity (NFE)	Passive non-financial entity
Situation	The trust is an investment entity	For example, the trust is a non-profit entity ("regulated charity")	The trust is neither a financial institution nor an active NFE
Person responsible for obligations	Trustee	Financial institutions	Financial institutions
Reported persons	Settlor Mandatory beneficiaries Any individual exercising ultimate control over the trust Discretionary beneficiaries (only if they have received a distribution during the year) Holders of debt securities	N/A	Settlor Trustee Protector Mandatory beneficiaries Discretionary beneficiaries (only if they have received a distribution during the year)

Financial accounts

Reportable accounts include accounts held by individuals, some entities and certain investment vehicles, which includes some trusts and certain Monegasque non-trading companies. The Common Reporting Standard includes a requirement to look through passive entities in order to identify and report on the reportable individuals who control these entities.

No accounts are excluded in Monaco, beyond those already excluded in the Common Reporting Standard:

Retirement and pension accounts
Tax favoured accounts other than retirement accounts
Temporary life insurance policies
Estate accounts
Escrow accounts
Deposit accounts with unreturned overpayments

Due Diligence Process

The Common Reporting Standard sets out a solid body of due diligence procedures which reporting financial institutions must follow in order to determine reportable accounts and obtain the required identification information from account holders for these accounts.

These procedures distinguish between accounts held by individuals and entity accounts, and between pre-existing and new accounts, recognising that it is more difficult and costly for financial institutions to obtain information from existing account holders than at the time of opening an account.

	Accounts held by individuals	Entity accounts
Pre-existing accounts (Accounts opened before 1 January 2017)	No de minimis threshold Lower value accounts (<1M$): simplified due diligence procedures. Residence address test based on documentary evidence and/or electronic indicia search Higher value accounts (>1M$): enhanced due diligence procedures. As a rule, these involve a paper record search and an actual knowledge test by the relationship manager	De minimis threshold of USD 250,000: no review for accounts below this amount (if option selected) The financial institution must first determine if the entity is a reportable person, drawing on the information it has through anti-money-laundering procedures In the case of a passive financial entity, the financial institution must then determine if the person or persons who control the entity are reportable persons
New accounts (Accounts opened after 1 January 2017)	No de minimis threshold Tax residency is determined through self-certification by the account holder, which is verified against the information held by the financial institution	No de minimis threshold The tax residence of the entity and, in the case of a passive NFE, the persons who control the entity, is determined by self-certification when the account is opened

For new accounts opened on or after 1st January 2017 and for all pre-existing accounts that have been subject of a self-certification request and collection, the tax identification number must be reported.

For other pre-existing accounts for which a self-certification was not obtained, the reporting financial institution must provide evidence that it has made reasonable efforts to obtain the tax identification number at least once a year.

Reporting process

The competent authorities exchange information according to a secure IT schema (XML), on an annual basis, in the nine months following the end of the relevant calendar year N, i.e. before 30 September of the year following the relevant year N+1.

In Monaco, financial institutions have had to apply the reasonable due diligence rules for identifying reportable accounts since 1 January 2017.

Each year, reporting Monegasque financial institutions have until 30 June of the year N+1 to send information relating to the calendar year N.

The global reporting process for Financial Institutions includes:

XML reports to all partner jurisdictions in which their financial account holders are resident for tax purposes, and
A compulsory nil report for all partner jurisdictions in which the Financial Institution has not made a report due to a lack of declarable financial accounts

A user guide of the automatic exchange of information reporting platform, intended for the use of the professionals involved in the process, is available and can be downloaded at the bottom of this page.

The reporting Monegasque Financial institutions must use the latest XML2.0 schema published by the OECD.

The XML schema template and associated user guide are available for download at the bottom of this page or directly on the OECD’s official website at: www.oecd.org/tax/automatic-exchange

[1] It is not mandatory to report place of birth in Monaco.