Capital Gains Taxation in Montenegro
In Montenegro, capital gains are subject to taxation under the Law on Income Tax ("Official Gazette of Montenegro", No. 73/2021). The law defines capital gains as any profit derived from the sale or disposal of capital assets, including:
- Real estate properties
- Stocks and securities
- Bonds and debentures
- Business assets
The calculation of taxable capital gains involves determining the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is as follows:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Montenegro applies a flat tax rate of 9% on capital gains. However, certain exemptions or preferential tax treatment may apply under specific provisions of the Law on Income Tax. For instance, capital gains derived from the sale of real estate properties held for more than two years are exempt from taxation.
The legal framework governing capital gains taxation in Montenegro aims to ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals. By applying a flat tax rate to capital gains, Montenegro seeks to maintain a neutral tax treatment across different sources of income and promote investment while generating revenue for the government.
If delving into the depths of Montenegrin tax rules and regulations isn't your style, and you'd rather have experts take the reins, then Heavnn is here to help.
Let us simplify your tax planning journey. Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
