The income tax treaty between Monaco and Montenegro was signed on 29 May 2019. The treaty 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 will enter into force 30 days after the ratification instruments are exchanged and will generally apply from 1 January of the year following its entry into force.
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