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.
Personal income tax rates
As of 1 January 2022, progressive taxation of salary and income earned by entrepreneurs 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.
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.