Verified Facts
The tax rates in Montenegro range from 9% to 15% for personal income tax, with a corporate tax rate of 15% and a standard VAT rate of 21%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Montenegro operates a territorial taxation system, where residents are taxed on their worldwide income, but non-residents are only taxed on income derived from Montenegrin sources. To be considered a tax resident in Montenegro, an individual must have a permanent home in the country, or spend more than 183 days in a calendar year in the country. The tax system is designed to attract foreign investment and promote economic growth, with a relatively low tax burden compared to other European countries.
The tax authorities in Montenegro are responsible for collecting taxes, including personal income tax, corporate tax, and VAT. The tax year in Montenegro runs from January to December, and taxpayers are required to file their tax returns by March of the following year. Montenegro has a network of double taxation treaties with 45 countries, which helps to prevent double taxation and fiscal evasion.
Personal Income Tax
| Income Bracket (EUR) | Tax Rate |
|---|---|
| 0 - 3,000 | 9% |
| 3,001 - 7,000 | 10% |
| 7,001 - 12,000 | 12% |
| 12,001 - 20,000 | 13% |
| above 20,000 | 15% |
| Personal income tax in Montenegro is progressive, with rates ranging from 9% to 15%. Taxpayers are entitled to various deductions and allowances, including a personal allowance, deductions for charitable donations, and allowances for dependent family members. Tax returns must be filed electronically, and taxpayers are required to pay their taxes in advance, with the option to claim a refund if the advance payment exceeds the actual tax liability. |
Corporate & Business Tax
- The corporate tax rate in Montenegro is 9% for small businesses and 15% for large businesses, with a small business defined as a company with annual revenues of less than EUR 100,000.
- Small businesses are eligible for various incentives, including a reduced corporate tax rate, exemptions from VAT, and subsidies for investment in research and development.
- Montenegro has several free zones, which offer tax exemptions, customs duty exemptions, and other benefits to companies operating in these zones.
- Companies must register with the tax authorities and obtain a tax identification number before commencing business operations.
- Foreign companies operating in Montenegro must also register with the tax authorities and obtain a tax identification number.
VAT / Sales Tax
- The standard VAT rate in Montenegro is 21%, which applies to most goods and services.
- A reduced VAT rate of 7% applies to certain goods and services, including food, water, and pharmaceuticals.
- Exemptions from VAT apply to certain goods and services, including financial services, insurance services, and educational services.
- Tourists are eligible for a tourist refund scheme, which allows them to claim a refund of VAT paid on goods purchased in Montenegro.
For Expats & Foreign Workers
- Tax residency rules apply to foreign workers who spend more than 183 days in a calendar year in Montenegro.
- Montenegro has a network of double taxation treaties with 45 countries, which helps to prevent double taxation and fiscal evasion.
- Foreign workers are required to register with the tax authorities and obtain a tax identification number before commencing work in Montenegro.
- Foreign workers are entitled to social security benefits, including health insurance, pension insurance, and unemployment benefits.
- Foreign workers must comply with remittance rules, which require them to remit their taxes to the tax authorities.
- Foreign workers may be eligible for a tax exemption on foreign-sourced income, depending on their country of residence and the terms of the double taxation treaty.
Crypto & Investment Income
- Investment income, including dividends, interest, and capital gains, is subject to personal income tax.
- Cryptocurrency is considered a form of investment income and is subject to personal income tax.
- Dividends paid to non-resident shareholders are subject to a withholding tax of 9%.
- Capital gains from the sale of securities are subject to personal income tax, with a tax rate of 9% to 15% depending on the individual's tax bracket.