Montenegro Tax System

Currency: Euro (EUR)

No Foreign exchange control
International Accounting Standards.
Financial statements to be filled annually.
Business entities: Joint stock company, limited liability company, partnership and
branch/representative office of foreign corporation.

Corporate taxation:
A company registered in Montenegro is treated as resident, for tax purpose.
Resident companies are taxed on worldwide income, nonresidents are taxed only on Montenegro-
source income.
Taxable income is based on accounting declared profit, further adjusted for tax purpose by
nondeductible expenses, nontaxable income, tax depreciation, etc.
Tax rate 9 %.
No Surtax.
No Alternative minimum tax.
Tax losses may be carried forward for 5 years. The carry back of losses is not permitted.
No Holding company regime.

Withholding tax:
Royalties paid to nonresidents are subject to withholding tax of 9%, unless the rate is reduced under
an applicable tax treaty.
A 9% withholding tax applies to Service fees paid to nonresidents for market research, advisory and
audit services as well as on income from the leasing of movable and immovable property.

Other taxes on corporations:

No branch remittance tax.
No Stamp duty.
Transfer tax of 3% is levied on the transfer of immovable property.
Tax year – Calendar year.
Consolidated returns are not permitted; each company must file a separate return.
Salary taxes is being paid in ratio of 1:0,7 which means that 100 € of net-salary
bears the 70 € of taxes and social contributions.

Personal taxation:
Residence – an individual is resident if says in Montenegro for 183 day or more in calendar year, or
if his centre of vital interest is in Montenegro.
Taxable income – income from employment, business and professional income, income from
immovable property, investment income.
Capital gains are not taxable.
A personal income tax of 9 %.
No Net wealth / net worth tax.

VAT
The standard rate is 17 %.
The reduced rate is 7 %.
Tax laws – Corporate Income Tax Law, Personal Income Tax Law, VAT Tax Law.
Tax authorities are organized within the Ministry of Finance.