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Montenegro Income Taxes and Tax Laws













Last partial update, June 2016.
Previous 2006 update by Branka Buric


Income Tax Rates 2016
  • The 2016 individual income tax in Montenegro is flat, 9%.
    A 11% tax rate applies to salary exceeding EUR 720.
  • Exemptions are granted to taxpayers with specific types of income.
Individual Income Tax in Montenegro
  • Income from employment is withheld and paid by the employer, monthly, reduced by any personal deductions.
  • Individual, who is a "permanent resident" of Montenegro, pays tax on his income earned in Montenegro and overseas.
  • A foreign resident pays tax only on his income earned in Montenegro.
  • A resident has right to personal deductions for each dependent family member in the amount of 120 Euro a year (10 Euro per month).
  • A resident is any individual who resides on the territory of Montenegro for at least 183 consecutive days in a tax year, or a person who has a center of his/her business activities or life interests.
  • Investment income of interest and dividends is taxed at 9%.



Corporate Tax in Montenegro
The 2016 corporate tax rate in Montenegro is 9% for domestic and foreign companies.



Capital Gains in Montenegro
  • Capital gains in Montenegro are added to the company's regular income.
  • Individuals' capital gains are taxed at 9% rate.


Reporting Dates and Payment in Montenegro

  • Income tax in Montenegro on revenues from employment is withheld at its source by employers. The tax is calculated based on the above scale, reduced by personal deductions, if any. Data on personal earnings and taxes paid of each employee have to be presented by January 31 for the previous year, by employer.
  • Income tax on revenues from sources other than employment is paid by taxpayer, who is obliged to file a tax declaration annually.
  • Tax declaration has to be filed no later than end of April, for the previous year.


Social Security in Montenegro

Employers and employees contribute to social security up to a ceiling of EUR 50,000 as follows:

  Pension Health Unemployment Total
Employer 5.5% 4.3% 0.5% 10.3%
Employee 15% 8.5% 0.5% 24%


Deduction of Tax at Source in Montenegro

Withholding taxes (paid at its source) from payments to non-residents are:
  • Dividends -9%
  • Interest - 9%
  • Royalties -9%
  • Services - 9%
Comments:
Deduction at source for payments to foreign residents is subject to the Double Taxation Prevention Treaty









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