Taxes in Montenegro
In Montenegro, taxes are lower than the European average. The country applies a flat tax rate to individual and corporate income, with some exceptions to the rule.
Individuals pay income tax at 11% if their monthly income is above average (about €750 a month) and at 9% if it falls below. Such rates apply to both residents and non-residents. Special conditions apply to non-residents regarding the interest income tax rate. It stands at 5% for non-residents, while residents of Montenegro pay a 9% on interest.
Legal entities pay a corporate income tax at a flat rate of 9%.
Purchase
When obtaining a property title, a property transfer tax is applicable totalling 3% of the property value, which is established when signing the sales agreement. This rate applies to both real estate and land plots.
The buyers of newly-built properties pay a 21% VAT.
Ownership
Real estate tax is paid by individuals and legal entities who own property in Montenegro. Its rate ranges between 0.25% and 1% of the property's cadastral value. For certain types of properties, the rate may reach 5.5% (e.g. for hotels in tourist zones).
The specific property tax amount depends on the property location, quality of facilities, proximity to the sea, and other factors.
For instance, a €100,000 apartment will be taxed €200-250 per annum.
Lease
If you want to rent your property out, you will have to pay a revenue tax at 9% of the total rental income.
If you lease a property in a tourist zone as an individual, you need to pay a tourist tax. The rate is not fixed and depends on the tourist zone, size of the property, number of days in the tourist season, and occupancy.
Sale, donation, and inheritance
No capital gains tax needs to be paid when selling real estate in Montenegro. If the property is donated or inherited, it is necessary to pay a transfer tax equal to 3% of the property's cadastral value.
The above article contains reference information on taxes in Montenegro. Certified tax experts in Montenegro will guide you through the nuances and help determine the exact tax amounts.
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