Montenegro

Individual - Other taxes

Last reviewed - 13 February 2020

Social security contributions

Social security contributions for pension and disability insurance, health insurance, and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. Unlike the other two types of social security contributions, pension and disability insurance contributions are subject to a specific annual cap (53,302 euros [EUR] for 2018).

Social security contributions are payable by the employer and employee at different rates. The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.

The rates paid by the employer are as follows:

  • Pension and disability insurance 5.5%.
  • Health insurance 2.3%.
  • Unemployment insurance 0.5%.

The rates paid by the employee are as follows:

  • Pension and disability insurance 15%.
  • Health insurance 8.5%.
  • Unemployment insurance 0.5%.

Consumption taxes

Value-added tax (VAT)

The main principles of the Montenegrin VAT are in line with the European Union (EU) Sixth Directive guidelines. Taxable supplies are subject to a general 21% VAT rate; however, certain supplies are taxed at a reduced 7% rate (e.g. bread, milk, books, medicines) and 0% rate (e.g. export of goods, supply of gasoline for vessels in international traffic).

See the Other taxes section in the Corporate tax summary for more information.