Foreign owners of Montenegrin real estate are usually told that tax on exit is handled at source — that the money arrives net and the paperwork is somebody else's problem. That is true of one version of the transaction and false of the other, and the difference is decided by something most sellers never think about: whether the buyer happens to be a company or a person.
When the buyer is a Montenegrin legal person, it withholds. When the buyer is an individual — which is the ordinary case for an apartment or a villa — nobody withholds anything, and the obligation lands on the foreign seller, with a 30-day clock and a requirement to act through a locally appointed representative.
Article numbers below are from the consolidated Zakon o porezu na dobit pravnih lica, chain "Službeni list RCG" 065/01 through "Službeni list CG" 088/24 of 13.09.2024 and 104/26 of 17.07.2026, read on 5 September 2026. General information about Montenegrin law, not advice on a particular sale.
Two routes out of the same transaction
Article 29(1)(2) requires a legal person paying a non-resident legal person to calculate, withhold and pay tax on, among other things, capital gains, and on rent for movable and immovable property. Article 29(4) sets that rate at 15%, calculated and paid at the moment of payment. That is the version people describe when they say tax is handled at source.
Article 29c covers everything the first route misses, and it is the provision that matters to a foreign company selling to a private buyer.
Article 29c(1) charges tax at 15% on income realised by a non-resident legal person from another non-resident legal person, or from a resident or non-resident natural person, on Montenegrin territory, on the basis of capital gains arising under Articles 21 to 24 — unless a double taxation treaty provides otherwise.
Article 29c(2) extends the same charge to rent from movable and immovable property under Article 29(1)(2) where the non-resident earns it from a person who is not obliged to calculate, withhold and pay withholding tax. Article 29c(3) applies it to entertainment, artistic and sporting performances in Montenegro.
Read those three paragraphs together and the structure is plain. Montenegro has not exempted the private-buyer sale. It has moved the obligation from a payer who would have withheld to a recipient who has to come forward.
The 30-day clock, and the representative
Article 29c(4) is the operative paragraph, and it carries four separate requirements.
The non-resident legal person receiving the income must file a tax return within 30 days from the day the income is realised. The return goes to the competent tax office in a municipality identified by the type of income:
| Income | Municipality where the return is filed |
|---|---|
| Capital gain on real estate | where the immovable property is located |
| Capital gain on a shareholding or securities | where the company whose interest or securities are sold has its seat |
| Rent for movable or immovable property | seat or residence of the payer of the rent |
| Entertainment, artistic or sporting performance | where the performance takes place |
The return must be filed through a tax representative (poreski punomoćnik) appointed under the legislation governing tax procedure and tax administration. This is not optional wording. A foreign company with no Montenegrin presence cannot simply post a form; the appointment has to exist before the return can be made.
On the basis of that return the tax authority issues a decision (rješenje) — an assessment, not a self-final calculation. Article 29c(5) leaves the content of the return to the Ministry.
The practical consequence is that the 30 days start running at completion, while the seller is typically occupied with the notarial deed, the cadastre and the transfer of funds. A tax representative appointed after the deadline has passed does not restore it.
How the gain is actually computed
The 15% does not apply to the sale price. It applies to a gain determined under Articles 21 to 24, and those articles contain several rules that change the number materially.
Article 21 defines the capital gain as income realised on the sale or other transfer of land, buildings, property rights, capital shares and securities. The category is broader than real estate: a foreign company selling its interest in a Montenegrin d.o.o. is inside the same definition.
Article 22(1) computes the gain as the difference between the sale price and the acquisition price adjusted as the Act provides; Article 22(2) makes a negative difference a capital loss.
Three provisions then interfere with the arithmetic in ways that are easy to overlook.
Article 22(3) provides that where the sale price is lower than market value, the competent tax authority adjusts to market value. A contract price agreed below market does not produce a lower gain — it produces an adjustment.
Article 22(4) puts a positive duty on the taxpayer: on sale or transfer, it must carry out a valuation of the asset's market value in accordance with the regulation governing asset-valuation methodology. The valuation is not something the seller may commission if it wishes to argue about the figure; the Act requires it.
Article 24(4) is the one that reaches back years. For real estate, the acquisition price is the price at which the property was acquired or the price the competent tax authority determined at the time of acquisition under the real estate transfer tax legislation. The figure entered at purchase — and any figure the tax authority substituted for it then — becomes the base against which the exit gain is measured. A low declared price on the way in is not a saving carried forward; it is a larger taxable gain on the way out.
The remaining rules complete the picture:
- Article 23 treats the sale price as the market value of the consideration received, in money or in kind, less the costs of the sale or other transfer.
- Article 24(1) takes the acquisition price from the accounting records, reduced by depreciation under Article 13; Article 24(3) lets the tax authority determine a market price at the acquisition date where the books do not show one properly.
- Article 24(5) values property under construction at the construction costs recorded in the books up to the day of sale.
- Article 24(6) deals with property acquired by gift or inheritance: the acquisition price is the price at which the donor or the deceased acquired it. There is no step-up on death or on gift — the original cost carries over, and with it the whole accrued gain.
- Article 22(5) allows capital losses to be set against capital gains realised in the same year, and Article 22(6) allows any remaining loss to be carried forward against future capital gains for five years.
The rent case, which repeats
The sale is a single event. Article 29c(2) attaches the same machinery to something that happens every month.
Where a non-resident legal person rents out Montenegrin property and the tenant is not a person obliged to withhold — a private tenant, in other words, rather than a company — the rent falls under Article 29c(2), and Article 29c(4) applies to it in the same terms: a return, through a tax representative, at the tax office in the municipality of the payer's seat or residence, within 30 days from the day the income is realised, followed by an assessment.
On the face of the text that clock runs from each receipt rather than from the end of a year, which for a monthly tenancy points to a recurring filing rather than an annual one. The Act does not consolidate them, and Article 29c(5) leaves the form to the Ministry. Because that reading produces a materially different compliance burden from an annual return, the filing frequency actually applied to residential rent is worth confirming with the competent tax office before a letting structure is relied on — but a foreign company letting to private tenants should not assume that one return a year discharges Article 29c(4).
Where the tenant is a Montenegrin legal person, the position reverts to the first route: it withholds under Article 29(1)(2), and Article 29(11) requires it to report the withheld tax to the tax authority by the end of February for the previous year.
The asymmetry in the withheld route
Where the buyer is a legal person and the first route applies, there is a question the statute does not settle cleanly, and it is worth raising before completion rather than after.
Article 29(1)(2) lists capital gains among the items on which the payer withholds. Article 29(4) then fixes the base as "the gross amount of the income". Articles 21 to 24 define a capital gain as a net figure — sale price less adjusted acquisition price, less costs of sale.
Whether the buyer withholds 15% of the computed gain or 15% of the sum it pays therefore turns on how "gross income" is read against the Article 21 definition, and the two readings can differ by an order of magnitude on a property held for years. This belongs in the contract, with the computation and the supporting valuation agreed between the parties before funds move, because the party exposed to getting it wrong is the buyer, not the seller.
Article 29a(3) makes that exposure explicit in the treaty context: where the payer applies a double taxation treaty and the conditions in Article 29a(1) and (2) are not met, so that less tax is paid, the payer must pay the difference. Article 29a(1) sets those conditions — the non-resident must prove residence in a treaty state and be the beneficial owner of the income — and Article 29a(2) requires the residence to be proved to the payer by a certificate or equivalent document certified by the competent authority of the other contracting state.
A buyer asked to apply a reduced treaty rate on the strength of an assurance, rather than a certified certificate held on file, is accepting a liability the statute places on it alone.
Where the treaty actually helps
Article 29c(1) charges the 15% "unless a double taxation treaty provides otherwise", and Article 29a routes the same relief through the withheld version. Both are real, and neither should be assumed.
Whether a treaty removes or reduces Montenegro's right to tax a particular gain depends on the capital gains article of that specific treaty, and treaties differ — most notably in how they treat gains on shares in companies whose value derives principally from immovable property. That question has to be answered from the text of the treaty in force between Montenegro and the seller's state of residence, and confirmed against the certificate requirement in Article 29a(2), rather than assumed from the existence of a treaty.
What this changes about holding Montenegrin property through a company
None of this makes a corporate holding structure wrong. It makes three things concrete that are usually left vague until the exit:
The buyer's identity determines who files. A sale to a company is administered by the buyer; a sale to an individual is administered by the seller, in 30 days, through a representative who has to be appointed first.
The purchase price recorded today sets the exit base. Article 24(4) ties the acquisition side of the future computation to what was declared and assessed on the way in.
The valuation is a statutory duty, not a tactic. Article 22(4) requires it on transfer, and Article 22(3) lets the tax authority correct a price that sits below market.
A foreign company that knows which of the two routes its sale will take, and has the representative and the valuation in place before completion rather than after, is dealing with an administrative sequence. One that discovers Article 29c after the deed is signed is dealing with a deadline that has already started.
If you hold Montenegrin property or a Montenegrin shareholding through a non-resident company, our international tax work covers the exit computation and the filing route together, and real estate investment covers the transaction side that sets the base in the first place.
