Monaco: Bill establishing the proposed 2026 Amended State Budget submitted   On 30 June 2026, the Princely Government submitted Bill no. 1,127 establishing the Amended State Budget for the 2026 financial year. The Bill revises the revenue and expenditure forecasts set out in the 2026 Initial Budget to reflect changes in the economic environment and the progress of public projects.   Revenue revised downwards By way of background, Law no. 1,586 of 19 December 2025 established Monaco’s Initial State Budget for the 2026 financial year. Budget revenue was initially estimated at €2.217 billion, compared with €2.489 billion under the 2025 Amended Budget, representing a decrease of approximately 11%. The 2026 Amended Budget now forecasts revenue of €2.145 billion. This represents a reduction of €71.9 million, or 3.3%, compared with the Initial Budget. The decrease mainly results from lower tax receipts, particularly net Monaco VAT revenue and business profits tax. This reduction is nevertheless partly offset by increases in: State property income and revenue; revenue generated by administrative services.   Expenditure also adjusted Budget expenditure has been reduced to €2.139 billion, compared with €2.208 billion under the Initial Budget. This represents a decrease of almost €69 million, or 3.1%. The overall adjustment reflects two contrasting developments.   Increase in ordinary expenditure Ordinary expenditure has increased by €42.4 million, representing a 3% rise compared with the Initial Budget. This increase is mainly attributable to higher operating expenditure and public interventions.   Reduction in capital and investment expenditure Capital and investment expenditure has been reduced by €111.5 million, or 14%. This decrease notably results from the postponement or rescheduling of several major projects, leading to a revision of the timetable for expenditure initially planned for 2026.   The proposed 2026 Amended State Budget provides for a surplus Despite the reduction in revenue and the adjustment of expenditure, the proposed 2026 Amended Budget provides for a positive balance. The projected surplus, initially set at €8.8 million in the Initial Budget, has been revised to €5.9 million. The proposed Amended Budget therefore confirms the continued balance of Monaco’s public finances, notwithstanding lower projected tax revenue and changes to the public investment timetable.   Improved position of the Special Treasury Accounts The Special Treasury Accounts also show an improved financial position. Their overall balance, initially projected to record a deficit of €2.7 million under the Initial Budget, would become a surplus of €2 million under the proposed 2026 Amended Budget.   Key figures from the proposed 2026 Amended Budget Revenue: €2.145 billion Expenditure: €2.139 billion Projected surplus: €5.9 million Reduction in revenue compared with the Initial Budget: €71.9 million Reduction in expenditure compared with the Initial Budget: almost €69 million Special Treasury Accounts balance: +€2 million   Bill no. 1,127 will now continue through Monaco’s legislative process.

As the Monaco Yacht Show approaches, Italy has taken a further step in implementing the European anti-money laundering package. Italian Legislative Decree no. 122 of 10 June 2026, published on 8 July and effective from 23 July 2026, transposes several provisions of Directive (EU) 2024/1640, notably those relating to beneficial ownership transparency. This development is particularly significant for the yachting sector, as Italy is home to some of the world’s leading shipyards.   It must also be considered alongside Regulation (EU) 2024/1624, applicable from 10 July 2027. The Regulation introduces a specific obligation for certain companies incorporated outside the European Union when acquiring a yacht intended for non-commercial use with a value of €7.5 million or more. Before completing the acquisition, these companies will be required to disclose the identity of their ultimate beneficial owner to the relevant central register.   For purchasers using a Monaco company or another non-EU structure, UBO transparency will therefore become an important consideration from the initial structuring of the transaction through to closing. This European development echoes the requirements already well established in Monaco, where beneficial ownership identification and due diligence obligations play a central role in yachting transactions.   Ahead of MYS 2026, the recent adoption of the Italian legislation sends a clear signal: in the superyacht sector, transparency surrounding ownership structures is progressively becoming an integral legal component of the transaction.

The Princely Government has introduced Bill No. 1129, which aims to implement the OECD Pillar Two rules into Monaco law. The proposed legislation introduces a 15% global minimum effective tax rate for multinational enterprise groups with consolidated annual revenue exceeding EUR 750 million.   This reform forms part of the ongoing alignment of Monaco's tax framework with international standards. Rather than creating a new tax burden, its primary objective is to ensure that Monaco retains its taxing rights over profits generated within its territory, thereby preventing any top-up tax from being collected by other jurisdictions.   The Government has also highlighted that the new framework will strengthen legal certainty for businesses while preserving the Principality's attractiveness as an international business centre through compliance with the OECD's global tax standards.   The bill is particularly comprehensive, comprising nearly 100 pages and more than 100 articles. It is expected to be reviewed by the National Council in the coming months, with entry into force envisaged for fiscal years beginning on or after 31 December 2026.   This represents a significant development in the international tax landscape for affected multinational groups.   Our tax team is closely monitoring the legislative process and remains available to assess the practical implications of the proposed rules and assist businesses in preparing for their implementation.