Elaine Sciolino, Paris correspondent for the New York Times, has made a delightfully tongue-in-cheek suggestion that French millionaire footballers attempting to flee the punitive 75% tax rate proposed by France’s new socialist president, Francois Hollande, could lead to an exodus to Monaco – and result in a world cup win for the Principality.
In his followup article, veteran reporter John Haydon points out in today’s Washington Times that sadly such an outcome is technically impossible from a football perspective. AS Monaco FC is a club side playing in the French League, rather than a national team; and anyway the majority of the current players already live outside France, with ten playing in the English Football League, three for Spanish teams, one in Milan and one in Munich.
But there is a further, financial, reason why the humorous scenario painted by Ms Sciolino could not happen. In December 1961, French president Charles de Gaulle, fearing a tax drain on the French economy, pushed Prince Rainier III of Monaco into signing a fiscal pact ensuring that French citizens in Monaco could not benefit from income tax exemption.
To this day, only French nationals pay income tax in Monaco (although US citizens must also continue to pay US Federal tax wherever they are resident in the world). The amount payable is assessed according to the principles of French tax law and is paid directly to the French Government. Exceptions apply only for those French citizens who a) were habitually resident in Monaco for a period of five years on 13 October1962 and hold dual French and Monegasque nationality; b)are attached to the Prince’s household; or c) are the French spouses of foreigners residing in Monaco, whose marriage took place before 1 January 1986.
For those interested in learning more about the standoff between the two countries, a new movie, Grace of Monaco – starring Nicole Kidman as Princess Grace – is due to be released later this year. You can read more about it here.