Monaco has published Sovereign Ordinance No. 9.818 of 9 March 2023 in the Official Gazette, which provides that the income tax treaty with Montenegro entered into force on 14 January 2023. The treaty, signed 29 May 2019, is the first of its kind between the two countries.
The treaty covers Monaco profit tax on commercial income levied from individual persons and profit tax levied from companies. It covers Montenegrin corporate profit tax and personal income tax.
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.
Both countries apply the credit method for the elimination of double taxation.
Article 26 (Entitlement to the Benefits) includes the provision that the benefits foreseen in the treaty shall not be granted to a resident of a Contracting State that is not the beneficial owner of the income derived from the other State.
Article 26 also includes the provision that the provisions of the treaty shall not apply if the main purpose or one of the main purposes of any person concerned with the creation or assignment of the property or right in respect of which the income is paid was to take advantage of those provisions by means of such creation or assignment.
The treaty applies from 1 January 2024.