French residents in Monaco: center of economic interests and exemption from social security contributions

A French couple living in Monaco had paid social security contributions during 2019. Believing they were not liable for these payments, they requested a refund.

After their request was denied byadministration, they took the matter to court.

The Administrative Court of Appeal, to which the case was referred, ruled that while the tax treaty between France and Monaco provides that French nationals who move to Monaco are subject to income tax in France, the treaty does not, however, allow for such taxpayers to be subject to French social security contributions.

The Court will then determine whether, in this particular case, the couple should be considered French tax residents under French law.

It will then look at where the taxpayers' economic interests lie.

After finding that they had received a substantial amount corresponding to a liquidation bonus from a Luxembourg company, the Court ruled that even though this company—which had been incorporated to carry out a real estate transaction in Luxembourg—did not have its own resources to conduct its business, the income derived from its liquidation was not of French origin.

Given that the amount of the bonus far exceeded the couple’s other income and that they also owned significant assets in Monaco as well as real estate worth considerably more than their holdings in France, the Court ruled that the couple did not have the center of their economic interests in France.

Since they did not meet the other criteria, they were therefore not considered French tax residents under domestic law.

Therefore, they did not have to pay social security contributions on their income, which was subject to income tax in France.

CAA Marseille, April 16, 2026, No. 24MA02294

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