URGENT – action required!
Entities owning Monaco real estate
The deadline to comply with the requirements of Monaco law (Law 1381 of 29 June 2011) is rapidly approaching and urgent action must now be taken. In default, significant financial penalties can be imposed by the Monaco authorities on entities that have not appointed an authorised representative, a ‘mandataire’.
As considered in earlier News Updates, Law 1381 requires all entities that own real estate in Monaco must appoint a duly authorised mandataire in Monaco and file an annual declaration with the Monaco tax authorities.
All legal entities owning Monaco real estate are subject to the law, the only exceptions are ‘civil companies’ registered in Monaco where the shareholders are individuals whose identity has been disclosed to the Monaco Tax Office. This will include Monaco registered SCI’s and certain other companies described in the legislation. All other entities including offshore companies, trusts and foundations fall within the scope of the law.
The deadline for the appointment of the authorised mandataire is 30th June 2012. If a mandataire is not appointed the Law provides for the application of penalties, which are significant. A representative of Rosemont Monaco SAM has been authorised by the Monaco tax authorities to act as a ‘mandataire’.
Penalty for non-compliance
In default of the appointment of a mandataire, a tax charge will be levied of up to 1.5% of the current market value of the real estate owned by the entity in Monaco. This is not a one-off charge and will be levied each year the entity is in default.
Reduced tax on transfer: extended period
The transfer of ownership from an entity to direct ownership by an individual(s) will be subject to a reduced registration tax of 1% of the value of the property. This concession has been extended from 30th June to 30th September 2012 subject to certain conditions and providing the transfer completes by this date.
Individuals wishing to take advantage of this extension should not delay; any transfer after the September deadline will be subject to tax at the usual rates.
Annual Declaration obligations
An annual declaration must be filed with the tax office between 1st July and 30th September confirming whether or not there has been a change in the beneficial ownership of the entity. Any tax that is due must be paid by 30th November each year.
Penalties will be imposed for late filing with more severe sanctions for inaccurate declarations and a failure to file.
A representative of Rosemont Monaco SAM is a duly authorised Law 1381 ‘mandataire’.