Global Property Guide

Financial Information for the Residential Property Buyer


Living There

Last Updated: August 25, 2017

INDIVIDUAL TAXATION

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Residents are taxed on their worldwide income. An individual is considered resident in Montenegro if he has a place of residence there, a habitual abode, a centre of vital interests, or he stays in the country for more than 183 days in a year. Married couples are taxed separately.

INCOME TAX

Income tax is levied on the following: (1) employment income, (2) business and professional income, (3) investment income (dividends, interest, and royalties), and (4) income from immovable property. All forms of income, unless taxed at source, are generally aggregated and taxed at a flat rate of 9%.

Income from employment earned by resident individuals is subject to income tax at progressive rates, from 9% to 15%.

ANNUAL INCOME TAX ON INCOME FROM EMPLOYMENT

TAXABLE INCOME, €
TAX RATE
Up to €8,640 9%
Over € 8,640 15%
Source: Global Property Guide

MONTHLY INCOME TAX ON INCOME FROM EMPLOYMENT

TAXABLE INCOME, €
TAX RATE
Up to €720 9%
Over €720 15%
Source: Global Property Guide

RENTAL INCOME
Income from leasing out real estate property is included in aggregated taxable income and taxed at a flat rate of 9%. Costs incurred to generate income are deductible from the gross rent. A lump-sum deduction of 40% of the gross rent in lieu of actual itemized costs is also allowed.

CAPITAL GAINS TAX

Capital gains realized from sale of real property in Montenegro are taxed at a flat rate of 9%. Taxable capital gains are calculated by deducting the following from the selling price: acquisition costs and related expenses, and improvement costs.


PROPERTY TAX


Real Estate Tax

A property tax is levied on real estate property in Montenegro. The owner of the property, or the individual with rights to use the property, is liable to pay this tax. The tax is levied on the market value of the property at rates ranging from 0.1% to 1%. In some cases, property tax may be levied up to 5.5%.

Real estate property whose value does not exceed €5,000 is exempt from taxation. Taxpayers who are using the property are entitled to a credit in the amount of 20% of the tax due, with an additional 10% for each household member. The credit is limited to 50% of the total tax liability.


CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are taxed at a flat rate of 9%. Income-generating expenses and operating expenses are deductible when computing for the taxable income.

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