Montenegro Capital Gains Tax Guide 2026

Overview — CGT in Montenegro

Capital gains tax in Montenegro is governed by the Law on Personal Income Tax and the Law on Corporate Income Tax. Unlike jurisdictions with a separate CGT regime, Montenegro generally treats capital gains as ordinary income subject to the standard progressive rates. For individuals, gains from the disposal of real estate, securities, and other capital assets are aggregated with other income and taxed at 9/13% IIT rates. For companies, capital gains are included in taxable profit and taxed at 15% (or 9% for small businesses). The gain is calculated as the difference between the disposal proceeds and the acquisition cost, adjusted for inflation and allowable expenses.

Individual CGT — Progressive 9/13%

For individuals, capital gains are added to other income and taxed at the progressive IIT rates. The first EUR 1,000 of monthly equivalent income is taxed at 9%, and amounts above at 13%. However, capital gains are typically taxed separately at a flat rate in practice — 15% on gains from real estate and securities. The gain is calculated as: Selling price minus (Purchase price + documented improvement costs + transaction costs). Gains from the sale of assets held for more than 10 years may be exempt or taxed at a reduced rate depending on the asset type. For real estate held less than 3 years, the full gain is taxable.

Real Estate Gains

Gains from the disposal of real estate are subject to CGT at a flat rate of 15% for individuals (separate from the progressive IIT). Key rules:

• Primary residence — gain from the sale of the taxpayer's primary residence is exempt from CGT if the taxpayer has resided in it for at least 2 years and reinvests the proceeds in another primary residence within 1 year
• Holding period — real estate held for more than 10 years qualifies for exemption from CGT
• Short-term gains — real estate held for less than 3 years is subject to full CGT on the entire gain
• Non-residents — non-residents selling Montenegrin property are subject to CGT at 15% on the gain, with a withholding mechanism at the point of sale

Securities & Share Gains

Gains from the disposal of shares, bonds, and other securities are taxable. For listed securities traded on the Montenegro Stock Exchange, the gain is taxed at 15% for individuals. For unlisted shares, the gain is included in ordinary income. Capital losses on securities may be offset against capital gains in the same tax year, and excess losses may be carried forward for up to 5 years. Gains from the disposal of shares in Montenegrin companies by non-residents may be subject to CGT unless exempt under a double tax treaty. Montenegro follows OECD standards for taxing gains on shares of real estate-rich companies.

Corporate Capital Gains

Companies include capital gains in their ordinary business income, taxed at the standard CIT rate of 15% (or 9% for small businesses). There is no separate CGT regime for companies. Gains from the sale of fixed assets, investments, and subsidiaries are all included in taxable profit. Capital losses are offset against gains and may be carried forward for 5 years. Rollover relief may be available for gains reinvested in qualifying assets under certain conditions, subject to approval from the Tax Administration.

FAQs

When is a capital gain realised for tax purposes?

A gain is realised at the time of disposal, which includes sale, exchange, gift, or transfer of ownership. The gain is reported in the tax year in which the disposal occurs.

Can I deduct improvement costs from the gain?

Yes, documented capital improvements and transaction costs (legal fees, agent commissions, transfer tax) can be deducted from the gross gain. Routine maintenance costs are not capital improvements.

Are foreign capital gains taxable in Montenegro?

Yes, Montenegrin tax residents are taxed on worldwide capital gains. Foreign tax credits may be available under double tax treaties to avoid double taxation.

Disclaimer

This guide provides general information about Montenegrin capital gains tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Montenegrin tax advisor or the Tax Administration of Montenegro for advice specific to your situation. InvestmentKit does not provide tax advice.