Monaco Takes a Major Step Forward in Fight Against Tax Evasion

In a significant move to boost transparency and cooperation in the global fight against tax evasion, Monaco has ratified the Automatic Exchange of Information on Financial Accounts (AEOI) Convention and signed an Amending Protocol with the European Union.

AEOI Convention Enters into Force

The AEOI Convention, which was signed by Monaco’s Minister of Foreign Affairs and Cooperation, Mr. José Badia, on October 13, 2014, has now entered into force in over 100 countries, including Monaco. The convention aims to enhance international cooperation in tax matters by requiring jurisdictions to automatically exchange information on financial accounts held by non-residents.

Commitment to Implementing AEOI Convention

Monaco’s commitment to implementing the AEOI Convention is part of its ongoing efforts to increase transparency and combat tax fraud. Under the convention, Monaco will begin exchanging information collected in 2017 with other countries from 2018 onwards.

Multilateral Competent Authority Agreement (MCAA)

In addition, Monaco has signed the MCAA, which provides a framework for the automatic exchange of financial account information.

Amending Protocol to Agreement between European Community and Monaco

Monaco has also ratified an 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. This protocol brings Monaco’s tax laws into line with the EU’s common reporting standard, enabling automatic exchange of information between EU member states and Monaco.

Commitment to OECD’s BEPS Project

Monaco has also reaffirmed its commitment to the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) project. The country has undertaken to adopt all mandatory BEPS measures and apply them consistently, in line with its international obligations.

Implementation of Action 6 of BEPS Project

To implement Action 6 of the BEPS project, Monaco has acceded to the Multilateral Convention for the Implementation of Measures on Tax Conventions to Prevent Base Erosion and Profit Shifting (MLI). The country has also signed the Multilateral Agreement between Competent Authorities on the exchange of country-by-country declarations.

Monaco’s Legal Framework

To meet its obligations under Action 13 of the BEPS project, Monaco has put in place a new legal framework. The country has issued three sovereign orders to implement the necessary changes:

Sovereign Order No. 6.712 du 14 décembre 2017
Sovereign Order No. 6.713 du 14 décembre 2017
Sovereign Order No. 6.714 du 14 décembre 2017

These orders modify existing laws and regulations to ensure that Monaco complies with its international obligations under the BEPS project.

Conclusion

Monaco’s ratification of the AEOI Convention, signing of the Amending Protocol, and commitment to the OECD’s BEPS project demonstrate its continued efforts to enhance transparency and cooperation in tax matters. These measures are expected to significantly reduce the risk of tax evasion and promote a more level playing field for businesses operating in the country.

For more information on Monaco’s actions to combat tax evasion, please visit our website at [website URL].