Monaco: Domestic Corporate Taxation
Calculation of Taxable Base
This page was last updated on 27 February 2021.
Generally speaking, taxable income is based on US GAAP financial statements. The following are some rules particular to Monaco:
- Directors' fees are deductible up to a maximum based on turnover and the social security ceiling, and there is a reasonableness test;
- Inventory is normally valued at the lower of cost or market value; cost is determined either by FIFO or by average cost;
- One half of any increase in research costs is deductible, with an inflation adjustment;
- Certain types of provision are deductible, including specific loss provisions and provisions against asset valuations;
- Trading losses can be carried forward and set off against trading profits for a period of five years; trading losses can in some cases be carried back and set off against profits arising in the previous three years - a tax credit is issued;
- There are some limitations on the deductibility of luxury goods and services, interest on loans, and expenses against foreign source income;
Capital gains on the disposal of business assets are taxable as income.