Montenegro legal and accounting and tax considerations in 2024

1. Corporate tax Montenegro is levied at 9% – 15% depending on profit amount for both resident and nonresident companies;
2. Tax holidays of up to 9 years are available for production companies in underdeveloped areas;
3. The standard Value Added Tax (VAT) in Montenegro is 21%, with reduced rate of 7% for certain goods and services. Exports are VAT exempt;
4. Tax losses may be carried forward for up to five years and cannot be carried back;
5. Resident companies suffer a flat tax rate of 15% for payments including: i) dividends; ii) interest; iii) royalties and iv) capital gains;
6. Tax returns must be filed within three months from the end of the fiscal year. Late payments suffer daily penalty of 0.03%;
7. Progressive personal income tax is levied at a rate of 9% for gross income below US$1,000. Otherwise, fixed rate of 15% applies;
8. Finally, Healy Consultants will assist the Client with: i) Documenting and implementing accounting procedures ii) Implementing financial accounting software iii) Preparing financial accounting records iv) Preparing forecasts, budgets, sensitivity analysis and other services;
9. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
10. Montenegro has a simple tax system. For example, for non-residents, personal income tax, corporate income tax, tax on dividends, interest and royalties, are all charged at 9% – 15%.
11. Personal income tax in Montenegro is levied at a low 11% for gross salaries going over the average monthly salary. However, this is still one of the lowest personal income tax rates in the EU.
12. For non-resident companies, the Montenegro tax system is territorial. In other words, international companies pay taxes to the countries where they are based in and where their revenues are from.
13. Montenegro currently has 44 double tax treaties in place with countries including China, Kuwait, Switzerland, United Kingdom and UAE. Under the double tax treaty network, withholding taxes can be reduced for certain payments to non-residents.