Tax regieme in Montenegro

Thinking of buying a 2 bed apartment in budva in Montenegro. I was wondering if anybody knows what the tax situation is in relation to Capital gains, tax on rental income. Any information would be greatly accepted

Any takers on this one? Or even in relation to non-treaty countries in general?

I don't know anything about Montenegro but this might kick start the tread for you

Well I know you will have to pay tax on the rental income(less usual deductions as per Irish property ie mortgage interest, 12.5% F+F, maintenance ) in Ireland as if the property was in Ireland. When you sell the property you will have to pay Irish Capital Gains tax (less usual deductions) as if the property was in Ireland.

You will of course have to pay all the relevent taxes in the Foreign country.

It's now a case of finding out how much of the tax paid in the foreign country can used to reduce your tax liability in Ireland. Previous contributors to AAM have suggested that if no double tax agreement exists then you have to pay full tax in both countries. I don't think this is correct. I'm not 100% sure but the extract below from revenue.ie form IT70 seems to suggest that you can avail of deductions against your foreign Rental Income Tax for tax paid abroad. There is no mention of double tax agreements needing to be in place.

I do know that you cannot offset Irish rental losses against foreign rental profits and vice vearsa as they are different cases of income.


Revenue.ie Form IT70

"In general, income from foreign property is computed on the full amount of the income arising, irrespective of whether the income has or will be received in the State. In the case of foreign rental income this income is charged under Case III of Schedule D and the same deductions and allowances are available as if the income had been received in the State. Deductions are also normally available in respect of such income for sums in respect of foreign tax paid. This income should be included in an individual’s tax return on the Foreign Income panel."

Let's keep it on topic-the tax regime for property in Montengro.

I have removed several recent posts for various reasons.

Purchase tax of 2 per cent (second-hand) and 17 per cent (new builds) may be payable, and capital gains tax has been introduced on profits at re-sale. There is a formal land registry but it has not been compulsory to log land or property details, so disputes can arise.

Get independent, professional advice on all of the tax and investment issues from somebody with a knowledge of both jurisdictions (Ireland and Montenegro).

It would be well worth your while to get onto the Serbian-Montenegrin Embassy, or read the EU reports on the area. Hopefully the referendum this week will go okay, or it could be sticky!