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12.4.3. Documentation Requirements

Standard Documentation

There are no formal requirements to prepare a standard transfer pricing documentation.

Country-by-Country (CbC) Report

Country-by-Country (CbC) reporting requirements apply in Monaco from the reporting fiscal years beginning on or after 1 January 2018. Each ultimate parent entity of the MNE group that is resident in Monaco or a Monegasque surrogate parent entity, which is a constituent entity of the group, is required to file a CbC report if the total consolidated group revenue exceeds EUR 750 million during the fiscal year immediately preceding the reporting fiscal year.  

The requirement to submit a CbC report in Monaco also applies to local non-parent constituent entities if:

  • The ultimate parent is not required to submit a Cbc report in its jurisdiction of residence;
  • The ultimate parent's jurisdiction has a current international agreement with Monaco on the due date for the report but does not have a competent authority agreement for the exchange of CbC reports with Monaco; or
  • There has been a systemic failure for exchange by the ultimate parent's jurisdiction.

The contents of the CbC report include the following for each jurisdiction:

  • Table 1:
    • revenues (unrelated parties, related parties, and total);
    • profit (loss) before tax;
    • income tax paid (cash basis);
    • income tax accrued – current year;
    • stated capital;
    • accumulated earnings;
    • number of employees; and
    • tangible assets – other than cash and cash equivalents.
  • Table 2:
    • constituent entities resident in each tax jurisdiction (including Tax ID and address);
    • jurisdiction of organization or incorporation if different from jurisdiction of residence; and
    • main business activities of each constituent entity.
  • Table 3:
    • additional information or explanation deemed necessary to understand the CbC report.

The CbC report is required to be filed no later than 12 months after the last day of the reporting fiscal year of the MNE Group.

Further, a Monaco resident constituent entity of an MNE group is required to notify the tax authorities before the last day of the reportable fiscal year of the MNE group as to whether it is the ultimate parent or surrogate parent entity (i.e., a constituent entity appointed as a sole substitute for the ultimate parent company to file the CbC report) of the MNE group, or if it is not the ultimate parent entity or the surrogate parent entity, the name, tax identification number and tax residency of the reporting entity of the MNE group.

Penalties

Failure to comply with the following CbC reporting requirements may result in penalties:

  • Late filing of CbC report:
    • EUR 10,000 if the report is not filed on time;
    • EUR 50,000 if the declaration is filed within 30 days after the receipt of a formal notice sent via registered letter with acknowledgment of receipt; or
    • EUR 100,000 if the situation has not been regularized after this period;
  • Inaccuracies and missing information in the CbC report may lead to a penalty of EUR 150 (EUR 250 if the entity fails to regularize within 30 days after the receipt of a formal notice sent via registered letter with acknowledgment of receipt); and
  • Failure to provide notification will result in a penalty of EUR 750.