How Does Monaco Make Money?
These are the main two ways Monaco generates revenues: In the old days, before Princess Grace, the main source was revenues from the Societe Bains de Mer — i.e. hotels and casinos owned by he Principality. Neighbouring France said we don’t lie the idea of our richest & most productive French people moving to Monaco &/or going shopping to Monaco to buy things and escape taxes. So France passed laws to the effect that French people who move to Monaco will still be liable for French income taxes. Also France after a near war with Monaco now collects VAT (called TVA in Monaco) of around 20% on everything, but refunds it to Monaco. The refund of these TVA taxes is currently the main source of revenue for Monaco.
All other revenues like hotel taxes, inheritance taxes, port docking fees, corporate fees, building permits, admission to the Aquarium, Doll Museum, etc, these are peanuts compared to the TVA taxes paid into the Monaco treasury by France.
- W. G. Hill