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 1st January 2022, progressive taxation of salary and income earned by entrepreneurs is introduced. Proportional 15% tax rate is introduced to other type of income.
Salary is taxed in the following manner:
- Salaries up to EUR 700 (gross) are exempt from tax;
- Salaries ranging from EUR 701 up to EUR 1,000 (gross) are subject to 9% tax;
- Salaries from EUR 1001 (gross) are subject to 15% tax.
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 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.