This stunning Balkan gem, known for its picturesque landscapes, Mediterranean climate, and rich cultural heritage, has become an increasingly popular destination for expatriates.
In this guide, we’ll walk you through everything you need to know about relocating to Montenegro from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Montenegro follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you spend more than 182 days in Montenegro during the tax year period.
if your personal, economic and social ties are located in Montenegro during the tax year.
if your main residence is located in Montenegro during the tax year.
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Providing that you start a self-employed business in a non-developed region in Montenegro, tax on the business profits will be exempt for 8 years up to a limit of EUR 200,000. Montenegro can be a very tax efficient place to live for entrepreneurs and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
£200,000 exemption.
Applied for 8 years.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Montenegro, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Montenegro has 45 double taxation agreements signed.
