Income taxes

Last reviewed 21 Aug 2023

Tax rate

Income tax rate

1. realized as personal income - 9% on the taxable income of EUR 700 to EUR 1,000. - 15% on taxable income above EUR 1,000.01.
2. Additional income (other than employment income) should be reported in the annual tax return and is subject to rates: 9% tax rate on revenue from EUR 8,400 to EUR 12,000 and for revenue above EUR 12,000 tax rate is 15%.

Employment income is subject to surtax whereas tax base is tax calculated on employment income, while tax rate is determined by the local self-government.

Statutory withholding tax rate is 15%.

Mandatory SSC are pension and disability insurances (10%) and unemployment insurances (1%).

Income from independent activities (namely from supplementary entrepreneurial activities and occasional independent activities), as well as from property, capital, capital gains, income from sports activities, income from copyright and related rights, patents and trademarks, income of independent cultural professionals, earnings that are not wages and income from the internet and video games (gaming) are subject to 15% income tax.
Income from games of chance is subject to:
- 0% on winnings up to EUR 50.00,
- 10% on winnings from EUR 50.01 to €1,500.00,
- 15% on winnings exceeding EUR 1,500.01.

Special tax rates

N/A

Tax liability

The subject of taxation of a resident is the income earned by a resident in Montenegro and outside Montenegro.

The subject of taxation of a non-resident natural person is the income earned by a non-resident in Montenegro.

Unlimited

Residents are due to pay tax on worldwide income (except where DTA restricts the right to assess tax).

Limited

Non-residents are due to pay tax only on Montenegrin sourced income.

Tax assessment period

Calendar year

Income categories

Income from
1. Employement
2. Self-employment
3. Royalty
4. Real estate income
5. Capital
6. Capital gain
7. Internet and video games
8. Games of chance
9. Other income (rather then employment income)
10. income from sports activities

Accounting

Only needed for self-employed individuals.

Loss set-offs

Only capital gains could be offset with capital losses.

Loss carryback

Not possible.

Loss carryforward

Applicable only to losses generated by self-employment income; 5 years carry forward period.

No loss carry-back possible.

Operating expenses

Expenses of the business.

Tax allowable expenses

None

Lump sum option

Self-employed persons whose total annual turnover in the preceding year, or planned turnover when starting activity, is below EUR 30,000.01, may, upon their request, be granted the right to pay tax in a fixed annual lump-sum amount.

Motor vehicles

Same as for corporate income tax.

Social insurance

N/A

Withholding tax

5 % if interest is paid to non-resident, 5 % tax rate should apply (a lower rate may be provided in the applicable DTA).

Interest

15 % if interest is paid to non-resident, 5 % tax rate should apply (a lower rate may be provided in the applicable DTA).

Royalties

15 % or applicable DTA.

Dividends

15 % or applicable DTA.