Montenegro: Amendments to tax law, including real estate sales tax and corporate income tax
Parliament enacted amendments to tax law that include real estate sales tax and corporate income tax
Enacted amendments to tax law that include real estate sales tax, corporate income tax
The Parliament enacted amendments to the tax law (published in the official gazette no. 028/23 dated 10 March 2023) that include measures relating to real estate sales tax and corporate income tax.
Real estate sales tax
Progressive taxation of real estate sales is introduced in the following way—effective 1 January 2024:
- Sales of real estate up to €150,000 are taxed at a rate of 3%
- Sales of real estate ranging from €150,000 to €500,000 are taxed at a rate of 5%
- Sales of real estate above €500,000 are taxed at a rate of 6%
Corporate income tax
The following amendments with respect to corporate income tax are effective 18 March 2023:
- Payments made by a taxpayer on a loan to an unrelated individual up to the amount of €5,000 on an annual basis are exempt from withholding tax.
- The obligation to pay withholding tax at a rate of 30% on payments made by a taxpayer to a non-resident legal entity that is established or has a registered seat or a seat of management or has a place of effective management in a territory with tax sovereignty is introduced. The list of territories with tax sovereignty will be published by the Ministry of Finance on its website. This provision does not apply to a non-resident legal entity with tax residence in a country with which Montenegro has concluded an income tax treaty. In addition, an entity that is established or has a registered seat or has a seat of management or has a place of effective management in a territory with tax sovereignty is considered a related party to tax-resident income distributors.
- Beneficiaries of incentives for research and development are exempt from corporate income tax.
- Transactions between a Montenegrin branch office and its non-resident headquarters must be included in the transfer pricing documentation Local file.
Read a March 2023 report [PDF 774 KB] prepared by the KPMG member firm in Montenegro
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