Global Property Guide

Financial Information for the Residential Property Buyer


Taxes are moderate in Montenegro

Last Updated: August 25, 2017

INDIVIDUAL TAXATION

Nonresidents are taxed only on their income derived from sources in Montenegro. 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%.

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
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 0.25% to 1%. In some cases, property tax may be levied up to 5.5%.

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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