Montenegro

Individual - Taxes on personal income

Last reviewed - 21 April 2023

Taxation of individuals’ income in Montenegro is based on their residence status.

Residents are subject to tax on their worldwide income from any source.

Non-residents are taxed on income related to a fixed base/permanent establishment (PE) in Montenegro and royalties, interest, and rental income from immovable property in Montenegro.

Subject to personal income taxation are following sources of income:

  • Employment income;
  • Income from self employment;
  • Real estate lease income;
  • Investment income;
  • Capital Gains;
  • Income from sports activities;
  • Royalties income;
  • Other Income.

Personal income tax rates

As of 1 January 2022, progressive taxation of employment income and income earned by entrepreneurs (income from self employment) is introduced. A proportional 15% tax rate is introduced for other types of income.

Monthly salary is taxed in the following manner:

  • Salaries up to 700 euros (EUR) (gross) are exempt from tax.
  • Salaries ranging from EUR 701 up to EUR 1,000 (gross) are subject to 9% tax.
  • Salaries from EUR 1,001 (gross) are subject to 15% tax.

Monthly income earned by entrepreneurs is taxed in the following manner:

  • From EUR 8,400.01 to EUR 12,000 is subject to 9% tax.
  • From EUR 12,000.01 is subject to 15% tax. 

For all other sources of income, Law prescribes flat rate of 15%.

Local surtax

Local surtax exists in addition to personal income tax (PIT) and is paid to the municipality where the taxpayer is domiciled. Surtax of 13% is applicable in all municipalities with the exception of Podgorica and Cetinje, where the rate is 15%.

The surtax base is the amount of PIT assessed.