Monaco's government filed Bill No. 1129 before the National Council on 28 July 2026. The bill establishes a qualified domestic minimum top-up tax (QDMTT) designed to ensure a minimum effective tax rate of 15% for large multinational groups operating within the Principality.
The measure is a direct legislative implementation of Pillar Two of the OECD/G20 Inclusive Framework. It follows earlier steps Monaco has taken to align with international standards, including the adoption of automatic exchange of information. Bill No. 1129 continues that trajectory, though it represents a materially larger fiscal shift.
Scope: large multinationals only
The bill does not affect the whole of the Monegasque economy. It applies only to constituent entities located in Monaco that belong to a multinational enterprise group with consolidated annual revenues of at least €750 million. That threshold must be met in at least two of the four fiscal years preceding the year in question. Small and medium-sized enterprises and purely domestic groups are excluded. The parameters match those adopted by the Inclusive Framework.
How the QDMTT works
When the effective tax rate borne by a multinational group's Monegasque entities falls below 15%, Monaco itself levies a top-up tax to close the gap. The bill takes a deliberately limited approach. It implements the QDMTT only and does not, at this stage, introduce the Income Inclusion Rule or the Undertaxed Profits Rule also provided for under Pillar Two.
The sovereignty rationale
The strategic logic behind the bill is straightforward. Without a qualifying domestic mechanism, foreign jurisdictions in which a group's parent or other constituent entities are located would be entitled under Pillar Two rules to collect a top-up tax on profits earned in Monaco themselves. Legislative inaction would have transferred tax revenue to other states. By enacting its own qualifying mechanism, Monaco retains the right to collect that supplementary tax domestically.
A measured and open-ended approach
Rather than transposing the full Pillar Two architecture, the Monegasque government has chosen a targeted compliance approach. The bill expressly leaves open the possibility of further developments if the international framework changes or national interest requires it. That deliberate flexibility allows the mechanism to evolve without committing the Principality to rules it has not yet adopted.
For multinational groups established in Monaco, the approach provides a clear and predictable framework without an abrupt break from the existing tax environment.
Timeline
The provisions are due to enter into force for fiscal years beginning on or after 31 December 2026. However, the first filing obligations and the first top-up tax payments are not expected until 2029. That preparation period mirrors the deadlines adopted in other jurisdictions.
Tax departments of affected groups will need to plan compliance work well in advance, particularly the collection of jurisdiction-by-jurisdiction data required to calculate effective tax rates.