Tax System of Montenegro
A concise guide to the main taxes and business conditions
Corporate Income Tax
Montenegro uses a progressive corporate income tax rate that depends on annual profit:
Personal Income Tax
Salary income is taxed on a progressive scale (gross per month):
For entrepreneurs (annual income): up to €8,400 — 0%, from €8,400 to €12,000 — 9%, above €12,000 — 15%.
Other income — dividends, interest, rent, capital gains — is taxed at a flat rate of 15%.
The tax-free threshold of €700 per month makes Montenegro attractive for remote workers and freelancers with low to medium income.
Value Added Tax (VAT)
Small businesses with annual turnover below €30,000 may operate without VAT registration.
A second reduced rate of 15% was introduced on 1 January 2025 (Official Gazette of Montenegro 94/24, rulebook 117/24): accommodation services, catering and some goods were moved to it from the 7% rate. At the same time, the zero rate on the construction and furnishing of 5* category facilities was abolished.
Social Contributions
The contribution burden has been reduced substantially: mandatory health insurance contributions were abolished from 1 January 2022, and the October 2024 reform lowered pension contributions further.
Employee contributions (withheld from salary) — around 10.5%:
The employer's social contribution burden has also been cut significantly (0.5% unemployment insurance).
Exact contribution rates and bases depend on the type of employment and are revised periodically — check the current figures before making calculations.
Real Estate Tax
Real estate tax ranges from 0.25% to 1% depending on the municipality and property type, making Montenegro an attractive destination for property investment.
Advantages of the Tax System
- ✓Montenegro has double-taxation treaties with more than 40 countries
Important: key provisions of the Russia–Montenegro treaty have been suspended by Russia since August 2023 (Russian Presidential Decree No. 585). Reduced rates on dividends, interest and royalties do not apply — the tax consequences are assessed on a case-by-case basis.
- ✓Minimum share capital for a DOO is just €1
- ✓Company registration takes only a few days
- ✓Progressive taxation adapted to income level
- ✓VAT exemption for small businesses with turnover below €30,000