Understanding the process
Any company that belongs to a multinational enterprise group whose consolidated annual turnover in the previous financial year exceeds EUR 750 million must prepare a country-by-country declaration for its reportable Tax Year. (Article 3 of Sovereign Ordinance no. 6713 of 14 December 2017).
A multinational enterprise group is a group comprised of two or more companies, whose residence for tax purposes is in different jurisdictions, or that includes a company that is resident for tax purposes in one jurisdiction but is subject to tax in another jurisdiction with regard to activities undertaken through the intermediary of a permanent establishment.
The Entity that must make the country-by-country declaration is:
- Either the ultimate parent entity of a multinational enterprise group that is resident for tax purposes in Monaco
- Or a Monegasque substitute parent entity, which is a constituent entity of the group, and duly mandated by this group if one of the following conditions is met:
- The parent entity of the Multinational Enterprise Group is not required to submit a country-by-country declaration in its jurisdiction of tax residence
- The jurisdiction in which the Ultimate Parent Entity resides for tax purposes has signed an International Agreement to which the Principality of Monaco is a party, but is not a party to an Eligible Agreement between competent authorities in force in Monaco on the date scheduled for the submission of the country-by-country declaration for the Declarable Tax Year
- A systemic failure of the jurisdiction of tax residence of the Ultimate Parent Entity has been notified by the Department of Tax Services to the constituent Entity that is resident for tax purposes in Monaco
When a Constituent Entity of a Multinational Enterprise Group, resident for tax purposes in Monaco, is not the Ultimate Parent Entity or the substitute parent entity, it must declare the identity and tax residence of the reporting Entity to the Department of Tax Services. (art. 4 of Ordinance n°6713 of 14 December 2017)
The country-by-country declaration must be submitted on line on the Automatic Exchange of Information Portal : eai.gouv.mc
Reporting Entity Declaration
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The country-by-country declaration is to be submitted:
- For financial years beginning on or after 1 January 2018
- Within 12 months after the last day of the reportable tax year
The declaration by the reporting Entity must reach the Department of Tax Services before the last day of the reportable Fiscal Year of the Multinational Enterprise Group.
Note that, in the presence of several constituent companies in Monaco, each of these entities must prepare this declaration.