Living in Monaco is often perceived as tax-free, but the reality is slightly different. While residents enjoy significant tax advantages, it’s not entirely tax-free. Monaco imposes an annual residency tax and certain types of income are subject to taxation. Nonetheless, with no capital gains, wealth, or inheritance tax, and a capped income tax rate, living in Monaco still offers substantial financial benefits. So, while not entirely tax-free, residing in this glamorous Mediterranean playground can undoubtedly lighten your tax burden.