The German Exit Tax (Wegzugsteuer)
Germany's exit tax (Wegzugsteuer) is the primary concern for German residents considering a move to Monaco. Under Section 6 AStG (Außensteuergesetz), German tax residents who hold significant participations (1% or more) in corporations face a deemed disposal tax on unrealized capital gains when they leave Germany. Since Monaco is not an EU/EEA member, the exit tax is immediately payable (no deferral option available as it would be for moves within the EU).
| Tax Consideration | Germany | Monaco |
|---|---|---|
| Income tax | Up to 45% + 5.5% solidarity | 0% |
| Capital gains tax | 26.375% (Abgeltungsteuer) | 0% |
| Exit tax on participations ≥1% | Immediate payment (non-EU) | N/A |
| Extended tax liability | Up to 10 years post-departure | None |
| Pension taxation | Taxable in Germany | 0% on non-German pensions |
| Wealth tax | None (abolished 1997) | None |
Extended Tax Liability (10 Years)
Beyond the exit tax, Germany's extended limited tax liability (erweiterte beschränkte Steuerpflicht) can extend German taxation for up to ten years after departure for individuals who spent at least five of the last ten years as German tax residents. This extended liability covers German-sourced income and certain types of foreign income. Careful timing and structuring of the departure can significantly reduce the impact of these provisions.
As EU nationals, Germans do not require a visa and can apply directly for a carte de séjour. The residency process is faster than for non-EU nationals. Nice is a 90-minute flight from Munich or Frankfurt.
Practical Steps for the Move
The Monaco residency process for German nationals is straightforward. As EU nationals, Germans do not require a visa and can apply directly for a carte de séjour. The standard requirements apply: Monaco bank account with sufficient funds, accommodation in Monaco, clean criminal record (Führungszeugnis), and health insurance. Many Germans find the transition smooth given the proximity and the established German-speaking community in Monaco.
- Formal deregistration (Abmeldung) at the Einwohnermeldeamt
- Notify German banks, insurance companies, and pension funds
- Obtain Führungszeugnis (criminal record check)
- Plan exit tax payment or deferral strategy with Steuerberater
- Open Monaco bank account and secure accommodation
- Consider German pension rights (Rentenansprüche) implications
Verify if your profile meets Monaco residency requirements as a German national.
Key Takeaways
- Germany's exit tax (Wegzugsteuer) applies immediately for moves to Monaco (non-EU) on participations ≥1%
- Extended tax liability can reach up to 10 years after departure from Germany
- EU nationals can apply directly for Monaco carte de séjour — no visa required
- German pensions remain taxable in Germany regardless of Monaco residency
- Engage a German Steuerberater + Monaco advisor to optimize the transition