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)
4. Income from immovable property

All forms of income, unless taxed at source, are generally aggregated and taxed at a flat rate of 15%.

Rental Income

Income from leasing out real estate property is included in aggregated taxable income and taxed at a flat rate of 15%. Costs can be deducted up to 30%.

Capital Gains

Capital gains realized from the sale of real property in Montenegro are taxed at a flat rate of 15%. Taxable capital gains are calculated by deducting the following from the selling price: acquisition costs and related expenses, and improvement costs.

Corporate Taxation

Income Tax

Income and capital gains earned by companies are taxed at a flat rate of 15%. Income-generating expenses and operating expenses are deductible when computing for the taxable income.

Buying and Selling Costs

Cost Component	Percentage of Property Value	Who Pays?
Property Transfer Tax	3%	Buyer
Agent Fee (Buyer)	3-5%	Buyer
Agent Fee (Seller)	3-5%	Seller
Legal Fees	3%	Buyer
Notary Fees	0.01%	Buyer
Roundtrip Transaction Cost	7.00%	Buyer & Seller
Source: Global Property Guide, KPMG

Property Holding 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%.