Living in Montenegro: residence beyond 183 days, salaries from 0 to 15 %, capital and capital gains at 15 %

In Montenegro, the Personal Income Tax Law defines a resident as someone who has their domicile or the center of their professional and vital interests in the country, or who resides there for more than 183 days during the tax year. Residents are taxed on both their Montenegrin and foreign income. According to Article 10, as amended since January 1, 2026, salaries are taxed at 0% up to €700, 9% from €700.01 to €1,000, and 15% above that; the same tax brackets are already included in the consolidated legislation until 2022. Capital gains, capital appreciation, and rental income are taxed at 15%. Real estate transfer tax is levied on a scale ranging from 3% to 6%.

This page does not deal with visas, social security contributions, or the conditions for a foreigner to purchase property.

Who is a resident?

According to Article 3 of the Law on Personal Income Tax (consolidated text, last amendment mentioned: Official Gazette No. 152/2022), a resident is a person who:

• has his domicile (prebivalište) or the center of his professional and vital interests in Montenegrin territory;
• or stays in the territory for more than 183 days in the fiscal year.

Article 3, paragraph 2, also defines as a resident any person sent outside Montenegro to work for a natural or legal person resident in Montenegro or for an international organization. Article 4 defines the scope of the tax. For residents, it applies to income earned both in and outside Montenegro. For non-residents, it applies only to income earned in Montenegro. The text does not define the center of interests beyond this formula.

Wages and self-employment: the income brackets of Article 10

The amending law adopted on December 27, 2025 (Official Gazette No. 160/25) has been in effect since January 1, 2026. Article 3 replaces Article 10 of the law, which sets the rates. The official portal biznis.gov.me presents the salary brackets as monthly and gross (page dated December 6, 2023).

The other paragraphs of point 2 (self-employment) and the income from points 3 to 9 of Article 12 are taxed at 15% of the tax base. The 2025 law distinguishes between primary, secondary, and occasional activity.

For 2025 income, the tax authorities indicated in a notice dated April 8, 2026, that annual tax returns (form GPPFL) would be considered filed on time until May 30, 2026, and that payment would still be due on April 30, 2026. The notice specifically mentions residents with income from real estate, capital gains, or foreign sources. Non-residents only need to file for their Montenegrin income not subject to withholding tax.

Dividends, interest, capital gains and rents: 15 %

According to the consolidated text up to 2022 and article 10 amended in 2025, these revenues are subject to a rate of 15 %.

No expenses are deductible from capital income (Article 37, paragraph 3). For capital gains, the gain is the difference between the sale price and the purchase price. The purchase price is indexed to retail prices; if it cannot be established, 80% of the sale price is used. The text does not specify a holding period beyond which the gain ceases to be taxed.

Article 37g excludes from tax the gain on housing that is the taxpayer's sole and principal place of residence (domicile), certain transfers between spouses or partners related to marriage, divorce or inheritance, and gifts to first-order heirs.

For rental income, a standard deduction of 30 % applies in the absence of substantiated expenses. This deduction is 50 % or 70 % for short-term tourist rentals, according to the conditions of Article 35.

Residents who have paid tax abroad receive a tax credit of an equal amount, up to the limit allowed under Montenegrin law (Article 44). A double taxation agreement takes precedence over national law (Article 45).

Real estate: transfer tax and property tax

The Real Estate Transfer Tax Act (Official Gazette No. 36/2013, 3/2023 and 28/2023, text published on gov.me on 11/03/2025) applies the following rules:

• the person liable is the purchaser (article 7);
• the basis is the market value of the asset at the time of acquisition (article 9);
• Natural and legal persons, national and foreign, are treated in the same way, unless otherwise provided by international convention (article 3);
• The declaration must be filed within 15 days of the tax obligation arising, and the tax must be paid at the same time (Article 16).

The tax administration's information page on property transfers only mentions the rate of 3 %, which corresponds to the first tax bracket. The exemption for first-time homebuyers (Article 12) is reserved for adult Montenegrin citizens residing in Montenegro. A law dated February 27, 2026 (Official Gazette No. 33/26) added building land to Article 6, which excludes the acquisition of new buildings on which VAT is paid from the scope of transfer tax, effective April 1, 2026.

For property tax, the administration's website indicates a proportional rate of 0.25 to 1.00 of the market value for properties located in Montenegro. The website does not specify who is liable for payment or the payment deadlines.

Inheritance and gift

The same text treats the inheritance and gift of real estate as a transfer of ownership. The heir or donee is liable for the tax (Article 8). The tax scale in Article 11 applies, without a separate rate. The following are exempt from the tax (Article 14):

• the heir of the first order, the spouse and the relative of the deceased, and the donee of the first order as well as the spouse of the donor;
• the second-order heir, for a single dwelling, if he lived with the deceased or the donor for at least one year;
• the second-order farmer heir, for assets related to his activity, after at least three years of living together.

The law concerns the acquisition of rights to real estate located in Montenegro. It does not address properties located abroad.

Relationship with the Franco-Yugoslav convention of 1974

France does not have its own tax treaty with Montenegro. The French Official Tax Bulletin (BOFiP) applies the treaty signed in Paris on March 28, 1974, with the Socialist Federal Republic of Yugoslavia, which entered into force on August 1, 1975. An agreement of March 26, 2003 (Decree 2003-457) maintains its application, and the BOFiP indicates that the same rule applies to Montenegro (version of September 12, 2012). The BOFiP sets a ceiling of 5% of gross dividends if the beneficiary is a company that directly holds at least 25% of the share capital, and 15% in other cases. Interest and royalties are taxable only in the beneficiary's country. To benefit from these rules, a certificate of residence (form 5000) endorsed by the Montenegrin tax authorities is required. Further details can be found on our page dedicated to the treaty.

What this page does not cover

This document does not address the taxation of any potential regime for new residents or retirees, nor social security contributions, nor the conditions for a foreigner to acquire property, nor residence permits, nor the order of residency criteria in the convention in the case of dual residency. The definition of residency is taken from the text of the law. The amounts are those cited in the texts: they should be verified with the Montenegrin tax authorities. Balmont Conseil is not a law firm or a local tax advisor: local tax matters should be verified with a professional based in Montenegro. Matters pertaining to France, such as departure declarations, accounts to declare, and exit tax, are addressed in our pages on tax residency.

What changes depending on your situation

• Your number of days of presence and your home address in Montenegro.
• The location of your home and your professional and vital interests.
• The nature of your income: salary, self-employment, dividends, capital gains, rent.
• The value, use and method of acquisition of your real estate.

The rule depends on your situation. No results are guaranteed.