VAT: transcription of new tax measures in the Monaco Turnover Tax Code (2025)

Sovereign Order No. 11.430 of 8 August 2025 on value added tax (JDM No. 8760 of 15 August 2025) and Ministerial Order No. 2025-449 of 13 August 2025 on value added tax (JDM No. 8761 of 22 August 2025) amend the Monaco Turnover Tax Code (CTCA) and the Annex to the Code, respectively.

French provisions are transposed into Monegasque law, arising from:

• Law No. 2025-127 of 14 February 2025 on finance for 2025 (LF 2025),
• Order of 4 December 2024 on the nature and characteristics of energy renovation services benefiting from the reduced rate of value added tax provided for in Article 278-0 bis A of the General Tax Code,
• Decree No. 2025-153 of 18 February 2025 implementing Article 289 A bis of the General Tax Code relating to import agents,
• Decree No. 2023-377 of 16 May 2023 on invoices transmitted electronically and secured by means of a qualified electronic signature or stamp.

The new tax measures are applicable in principle to transactions for which the chargeable event occurs on or after 16 February 2025, unless otherwise specified.

Note: Pursuant to Article 15 of the Franco-Monegasque Tax Convention of 18 May 1963 (Sovereign Order No. 3.037 of 19 August 1963), turnover taxes are applied in the Principality of Monaco on the same basis and at the same rates as in France.

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MAIN CHANGES:

→ Definition of renewable energy

The definition of the term "renewable energy" (article 52-0 CTCA) ("energy produced from renewable non-fossil sources, namely wind energy, solar thermal or photovoltaic energy, geothermal energy, ambient energy, tidal energy, wave energy, osmotic energy and other marine energies, hydroelectric energy, biomass, landfill gas, sewage treatment plant gas and biogas") is taken from article L211-2 of the French Energy Code.

→ Photovoltaic installation ≤ 9 kWp

From 1 October 2025, the reduced VAT rate of 5.5% (instead of 20%) will be applied to the delivery and installation, in dwellings, of electricity generation equipment using solar radiation with a capacity of less than or equal to 9 kilowatts peak, whose design and characteristics meet the criteria defined by ministerial decree, enabling all or part of the following objectives to be achieved: 1° Electricity consumption at the place of production; 2° Energy efficiency; 3° Sustainability or environmental performance (article 52-0 P. CTCA).

→ Fossil fuel boiler

As of 1 March 2025 (except for transactions that were the subject of a dated quotation, accepted by both parties and for which a deposit was received before 1 March 2025), the standard VAT rate of 20% set out in article 51 CTCA applies to energy renovation services involving the supply or installation of a boiler capable of using fossil fuels (articles 52-0 bis, III bis and 56 bis, 2 bis c) CTCA). It was previously set at 5.5% or 10% depending on the type of device.

→ Energy renovation services for homes benefiting from the reduced rate of 5.5%

In order to benefit from the reduced rate of 5.5%, the recipient of the energy renovation service must certify on the quote or invoice that the conditions are met, replacing the previous written attestation by the recipient (articles 52-0 bis and 56 bis CTCA).

Furthermore, Ministerial Order No. 2025-449 of 13 August 2025 specifies the scope of the works and equipment concerned, as well as the applicable technical requirements and standards: thermal insulation, heating and domestic hot water production equipment using a renewable energy source, controlled mechanical ventilation systems with dual flow or single flow humidity control or hybrid humidity control, insulation of heat or domestic hot water production or distribution systems, heating control devices, devices for individualising heating or domestic hot water costs, devices for individualising heating or domestic hot water costs, maintenance and repair services for very high energy efficiency boilers (articles A-130 bis, A-130 bis A. to H. of the Annex to the CTCA) from 1 January 2025 (except for operations that have been the subject of a dated estimate, accepted by both parties and for which a deposit has been received before 1 January 2025: the VAT rate of 5.5% remains applicable to eligible work pursuant to Article A-130 bis of the Annex to the CTCA in its version in force on 31 December 2024).

→ Proceeds from the organisation of games of chance or gambling and the operation of slot machines

1° (proceeds from the organisation of games of chance or gambling) and 3° (proceeds from the operation of slot machines) of article 27 CTCA are deleted. The VAT exemption is therefore repealed.

Revenue from the operation of the French national lottery, the French national loto or the Monegasque loto and horse racing pari-mutuel betting (excluding remuneration received by organisers and intermediaries involved in their organisation) remains exempt from VAT.

→ Aviation sector

From 1 July 2025, the scope of the tax suspension regime is extended to the aviation sector. The suspension of VAT on imports will be extended to goods in the aeronautics sector that are placed under the IM/EX inward processing regime and used for the manufacture, repair, modification or transformation of goods under this regime, from the clearance of the regime until the delivery of aircraft, spacecraft and related equipment (article 50 A CTCA).

The suspension of VAT is a measure designed to simplify and limit cash flow costs, and provides a competitive advantage as it enables aeronautical operators to facilitate the supply of spare parts and components necessary for manufacturing and maintenance.

→ Electronic invoices guaranteed by means of a qualified electronic signature or a qualified electronic seal

In order to ensure the authenticity of the origin, integrity of the content and legibility of invoices from the time of issue until the end of their retention period, the taxpayer may issue or receive them using the qualified electronic signature or qualified electronic seal procedure within the meaning of eIDAS Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (article 71, VI, 2° and 4°).

Ministerial Order No. 2025-449 of 13 August 2025 specifies the conditions for issuing, signing, stamping and storing these invoices (articles A-153 ter, 1-153 ter A to A-153 ter C of the Annex to the CTCA, effective from 19 May 2023).

→ VAT-exempt transactions involving trade with non-EU territories, tax representative

Taxable persons who are neither established nor identified in Monaco or France may appoint one or more representatives to fulfil, in their name and on their behalf, their obligations in relation to declarations, payments, deductions, refunds and the keeping of records or statements, when the only transactions subject to VAT in Monaco that they carry out are transactions involving goods in the context of trade with third territories and are subject to an exemption giving rise to a right of deduction, an exemption from payment or a suspension of liability (2° of I of Article 72 bis CTCA).

Ministerial Order No. 2025-449 of 13 August 2025 specifies the nature of the transactions concerned (imports benefiting from VAT exemption; imports subject to VAT payment exemption; transactions carried out under VAT suspension arrangements), the conditions for identifying and appointing the representative responsible for these transactions to the Monaco Tax Services Directorate ("Direction des Services Fiscaux"), including the information to be provided, the agent's obligations (electronic filing of a return covering all transactions for the period declared in the name and on behalf of their principals; keeping and maintaining a detailed register of all transactions carried out on behalf of their principals with mandatory information), the end of the mandate at the initiative of the representative or the administration in the event of non-compliance with obligations or suspicion of fraud (article A-162 B of the Annex to the CTCA, effective 21 February 2025).

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