Corporate Income Tax (ISB) in Monaco: new rules regarding tax returns, delays, and penalties, applicable to financial years beginning on or after 1 January 2026 (Sovereign Order No. 12.211 of 23 October 2026)

Sovereign Order No. 12.211 of 23 October 2026 (JDM No. 8823 of 30 October 2026) amends Sovereign Order No. 3.152 of 19 March 1964 introducing a corporate income tax (ISB), as amended.

The amendments apply to the ISB for financial years commencing on or after 1 January 2026.

IN DETAIL

→ Request for information from businesses that may be liable for ISB

It is further stated that an inspector from the Tax Services Directorate (DSF) may issue a request for information to any company that may be liable for corporation tax, in respect of each tax period. If the company is liable for this tax, this request constitutes a formal notice to file the declaration provided for in Article 23 (Article 6, new point 3, OS 3.152).

→ Extension of the response time in the event of a correction

The tax inspector who intends to amend the tax returns and tax assessment submitted by the taxpayer must notify the taxpayer of the proposed amendment and state the reasons for it. Following this, the taxpayer now has a period of 30 days (compared with 20 days previously) to submit their acceptance or comments. In the absence of a response within this period, the inspector shall determine the basis of assessment, subject to the right of appeal (Article 26, paragraph 3 of 1. OS 3.152).

→ Increase in the amount of fines

The reference to the tax penalty being imposed “having regard to the size of the defaulting company, its usual tax behaviour and the frequency of any offences it may have committed” has now been removed (Article 36 of Ordinance 3.152).

The following are now subject to a tax fine of €700 (compared with €15 to €75 previously):
1. failure to submit the declaration of results provided for in Article 23 within the statutory time limit;
2. failure to reply within 30 days to the request for information referred to in Article 6 (see above).

Failure to include any of the information required in the declaration of results provided for in Article 23 will result in the imposition of a tax fine of €15 (compared with €1 to €15 previously).

Breaches of the provisions of Article 29 relating to the transfer or winding-up of a business shall give rise to the same penalties.

→ Late payment interest in lieu of a fine

Previously, any delay in paying provisional instalments or the balance of the assessed tax resulted, by way of compensation and in addition to the simple tax that should have been paid, in a tax penalty of 3 per cent of the amount of that tax in the first month following the due date, and then 1 per cent for each additional month of delay.

It is now established that any failure or shortfall in payment, or late payment, of provisional instalments or the balance of the assessed tax shall give rise to late payment interest, payable independently of any penalties, set at 0.20 per cent per month, which applies to the amount of tax for which the taxpayer is liable or the payment of which has been deferred. Interest on arrears is calculated from the first day of the month following the month in which the tax was due until the last day of the month in which payment is made (Article 35 of OS 3.152).

Where Articles 25 (assessment by the tax authorities) and 26 (audit and adjustment) are applied, the calculation of interest on arrears is finalised on the last day of the month in which the adjustment notice is sent. New interest on arrears is calculated, at the same rate and on the same basis, from the first day of the month following the month in which the tax became due until the last day of the month in which payment is made.

→ Surcharge for late submission of the declaration of results

Failure to submit, within the prescribed time limits, the declaration provided for in Article 23 shall result in the application of a surcharge to the amount of tax payable by the taxpayer or arising from the late submission of the return:
1° 10 per cent where no formal notice has been issued, or where the declaration is filed within thirty days of receipt of a formal notice requiring it to be submitted within that period;
2° 40 per cent where the declaration has not been filed within thirty days of receipt of a formal notice requiring it to be submitted within that period.

→ Rate of surcharge on standard duties in cases of bad faith or fraudulent conduct

It was previously stipulated that the tax was increased by a tax penalty equal to four times its amount in the event of bad faith or fraudulent conduct.

It is now established that simple rights that have been omitted or compromised are subject to a surcharge (Article 37 of OS 3.152):
1° of 40 per cent in cases of bad faith;
2° of 80 per cent in cases of fraudulent conduct.

This is without prejudice to the criminal proceedings and fines provided for by Sovereign Order No. 653 of 25 August 2006 concerning corporate income tax and value added tax and administrative sanctions (ranging from the temporary closure of the establishment to a permanent ban on carrying out business and compulsory liquidation) which could, furthermore, be imposed by the Minister of State at the request of the Director of Tax Services.