Taxes on Rental Income in Montenegro (2026): What to Count

How rental income is taxed in Montenegro depends on how you hold the property. A company (DOO) pays corporate profit tax on a progressive 9% / 12% / 15% scale, while an individual is taxed under separate rules that open guides put at around 9%. VAT applies above a turnover threshold, and the tourist tax is paid by the guest. Rates are as of November 2026; confirm them with an accountant before you act.

We run four houses in Žabljak with a Booking rating of 9.2. This is an owner's note, not tax advice, and where we have no firm number we say so.

What taxes and payments does a landlord face?

There are three, and none replaces another: income (or profit) tax, VAT above the threshold, and the tourist tax. Guest registration sits next to them. It is a duty rather than a payment, but missing it carries a real fine.

Item	Who pays	Base	Reference
Corporate profit tax (DOO)	The company	Profit after costs	9% / 12% / 15% (PwC Tax Summaries)
Individual tax	The individual	Set by rules for individuals	about 9% in open guides (Tranio), verify
VAT	VAT-registered host	Turnover	€30,000/year threshold, reduced rate for accommodation
Tourist tax	Guest, collected by host	Nights stayed	Rate set by the municipality

We cover the tourist tax and guest registration in our guide to running a rental business in Montenegro, so we won't repeat them here.

What is the corporate profit tax rate?

It is progressive: 9% on profit up to €100,000, 12% between €100,000 and €1.5 million, 15% above (PwC Tax Summaries). A handful of mountain houses will realistically sit on the bottom band, since their profit is an order of magnitude below €100,000.

The tax applies to profit, not revenue. You deduct the platform commission, utilities, cleaning, routine repairs and consumables, provided there are documents behind them. That is one reason a company forces better bookkeeping than a back-of-the-envelope model, which can miss the tax in either direction.

There is a flip side. A company's gain on selling the property also goes into the profit tax base, and there is no "zero capital gains" for a DOO. If you are the buyer, it is worth asking in what form the property is sold: see our piece on asset deal vs share deal.

Individual or DOO: which is better?

There is no universal answer. For one or two units an individual is simpler and cheaper to run. For four houses and growing turnover a company is usually the better fit, because individuals face limits on rooms and beds and a company's cost records are cleaner.

What to weigh:

• how many units you have, and whether you hit the individual limits;
• whether you plan to sell: companies and properties are sold differently, and we explain the property transfer tax in our article on purchase tax;
• whether you want residency through a company, which is its own route: residency through a company;
• who keeps the books: a DOO needs an accountant all year.

We deliberately give no formulas for individuals. Calculations online contradict each other, and a mistake costs more than a consultation.

Do I need VAT for short-term rentals?

Probably, if your turnover is above the threshold. Open guides give €30,000 of annual turnover as the registration threshold, with a reduced rate for accommodation. An accountant should confirm the exact rate and conditions for your case. It is not in our internal sources, so we won't quote a number.

For our property this is not theoretical. Gross income from four houses in Žabljak is €48–56k a year, above the threshold. A buyer of a running business should find out early whether the seller is VAT-registered and how that status carries over (or doesn't) in the deal.

How much does tax take, on a real example?

Profit tax takes about €2,900 a year from four houses, roughly one percentage point of yield. That is our estimate based on the sale scenarios, not a filed tax return, and we label it that way until the accountant's figure is confirmed.

Take an average gross of €52k and follow the money in the order it leaves:

Line	Per year
Gross income	≈ €52,000
Running costs (utilities, heating, cleaning, repairs)	≈ €12,500
Booking commission ~15%	≈ €7,800
Profit before tax	≈ €31,700
Profit tax at 9%	≈ €2,900
After tax	≈ €28,700

Against a €280,000 price, €28.7k is about 10%. Skip the tax and you get about 11%. That is where "~10–11% net yield" on the Family House Pleme page comes from: the low end includes tax, the high end doesn't. The €10–15k a year of costs is the owner's real data, without the platform commission, as we broke down in what a house in Žabljak earns.

The point for any investor: profit tax moves yield by fractions of a percent, while a forgotten platform commission or missing costs move it by several points. We show how to build the number honestly in how to calculate property yield.

What to do before buying a rental business?

Ask for three documents and run one calculation. Documents: tax returns for recent seasons, proof of VAT status, tourist tax receipts. The calculation: net yield under your own ownership structure, prepared by an accountant.

In an asset deal the seller's tax history doesn't transfer to you, but you start your own. If you are considering buying a company, tax tails have to be checked separately. Rates and thresholds here are as of November 2026; confirm specifics with a licensed Montenegrin accountant.

To see these numbers on a live property, open Family House Pleme. The Booking export is available on request.