Taxation in Montenegro
Income Tax
An individual is considered a resident of Montenegro, if they spend at least 183 days in any calendar year in the country or have a permanent home available in Montenegro.
Non-residents earning income in Montenegro through ownership of property, are subject to taxation on their income derived in Montenegro.
The tax year corresponds with the calendar year.
The rate of Income tax on rental property is approximately 25%. Expenses directly relating to the rental income, e.g. repairs, management fees etc. are treated as tax deductible expenses.
Tax losses can be carried forward against future income for a maximum of 10 years.
At present Ireland and Serbia & Montenegro have not signed a tax treaty agreement.
Capital Gains Tax
Capital Gains arising from the sale of property are treated as income in the year of assessment. Any capital losses can be carried forward against future gains up to a maximum of 10 years.
Stamp Duty
Stamp duty is levied as a percentage of the value of the document at rates ranging from 0.15% to 0.75%.
Inheritance and Gift Taxes
Items acquired by way of gifts or inheritances are subject to taxes between 1% and 30% of the item's value. Tax paid in a foreign country on inherited property is deducted from the taxable value of the asset. Inheritance tax is payable over the period of three years and in two instalments per year.
Property Taxes
Property taxes are paid on immovable property located in the territory of the Republic of Montenegro, which is not exempt by the law. A property taxpayer is any person that is the owner of immovable property on the 1st January of the year for which the tax is established.
The property tax is based on the market value of the asset as at the 1st January. The rate is proportional and can vary from 0.08% to 0.8%
This document is only to be used as a guide to the tax systems in each country. It is not to be relied upon for tax planning reasons. Please contact Anne Brady DFK for advice if you require more information.