Tax System & Rates in Montenegro: Guide


There are many factors to consider when choosing the correct country to move to. If you intend to do business there, pay attention to the tax policy and its peculiarities. It directly affects how often you will deal with overpayments and expenses.

The Montenegro citizenship program has been in operation for many years. It implies simple conditions and rules. Thanks to this, new investors come to the country every year. They can make gratuitous investments or purchase real estate. These are the two main ways to obtain the right to stay in the country legally.

As for Montenegro’s taxes, it can be noted that the country has a progressive taxation system. According to a specialist company Immigrant Invest Victor Esik, the progressive scale varies from 9% to 15%. At the same time, if the salary is up to 700 euros a month, it is not taxed. As a result, favorable fiscal policy is one of the factors which speaks in favor of the popularity of this country. Furthermore, it has relatively low taxes, making relocation and starting a business here attractive.

Specifics of the Montenegro tax system

So, the minimum rate acting in this country is 9%. It is a little, especially in comparison with other European countries. And this figure is relevant not only for individuals but also for many companies.

However, the situation is gradually changing. For example, if the income exceeds 700-750 euros, it will be necessary to pay 11%. People also have to be prepared because various municipalities charge taxes of 15% of what is paid to the federal government. 

A particular system is also provided for non-residents. They pay 5% of their income. It is how the country’s government expects to attract more investment in the state. Here at, it is possible to find out more about it. This figure is significant for those who will move to the country.

Also, a more favorable system is created for Montenegrin companies. It has a lower rate than the values in other countries. However, many point out that local companies, due to the possibility of making payments in installments, more often have to deal with various paperwork. Naturally, this cannot make people happy.

As for the tax on wages, the figure can be as high as 15%. However, it is less compared to other EU countries. Also, 0.2% goes to the labor fund from gross wages. At the same time, in Montenegro, tax rates are more favorable for those who live outside the metropolitan area. In this case, the rate is only 13%. In this way, the local authorities are trying to stimulate the development of business and the emergence of labor not only in the capital city and on the coast but also in other parts of the country. 

Among other features of the tax system in the country is the availability of “vacations.” For example, they apply to newly established companies that operate in areas with low population density. It is another factor of how the country stimulates business development. Tax vacations are valid for eight years of work or when the first 200000 euros of profit. For many small companies, such reliefs help and develop their business.

Other features of the Montenegro tax system

It is worth noting that in Montenegro, there is an agreement on avoiding double taxation. It is valid for almost all European countries: from France to the Czech Republic. However, such an agreement does not apply to several countries, such as Canada or Ireland. Therefore, it must be taken into account.

If it is signed, you may have to pay taxes in the country on other types of income. 

Concerning real estate taxation, in this respect, Montenegro is similar to most other countries. Among the main varieties of real estate commissions are:

  1. Tax on the transfer of land, the purchase of which is carried out.
  2. VAT for new buildings.
  3. Capital gains tax. It applies, among other things, to immovable property.
  4. Tax on rental income. That is why it is imperative to conclude a contract with the tenant to ensure everything is legal.
  5. Annual property tax. Its rate is 0.25-1%. It is paid by the individual who is responsible for the property. It is not necessarily the owner of the apartment or house. The calculation of this type of tax is based on the market value of the property.

Also, the Montenegro tax system assumes a fixed fee for land transfer. This figure is 3%. However, if it is the first sale of the building, then the VAT is added. As a result, you have to pay 21%. In any case, Montenegro – is heaven for many because, in most other European countries would have to pay considerably more. 

As for the apartment rental tax, it is vital to many residents in 2022 and beyond. It’s no secret that many tourists come here, especially during the holiday season – many rent apartments. But, unfortunately, the government charges a fixed rate of 9 percent for this. 

What else is it necessary to know about the country’s tax system?

As previously mentioned, the minimum tax rate in this country is 9%. Corporations are allowed to incur losses for 1-5 years. 

Local companies pay 21% VAT. However, it is less than in many neighboring countries. Because of this, opening a private business in Montenegro is more attractive to many people. 

Other features of the tax system that apply in this country are:

  1. Reduced rate for some categories of goods. First, we’re talking about necessities like bread or milk. The reduced rate of 7% is also relevant for medicines, books, and computers.
  2. VAT is charged only if a net profit of 18,000 euros is reached. 
  3. VAT must be paid on the purchase of a new house. But if there is a purchase of a building that was previously taxed, then there is no need to do this.

Everyone who wants to start a business, buy real estate, or get other preferences should consider this.

Also, the transfer to this country is beneficial since local officials continue to work on tax legislation. They understand that this is what attracts many investors. So they try to create more favorable conditions.

People can already experience them when applying for Montenegro citizenship. The program for obtaining it has been in place for many years. Adult users can become a citizen. To do this, they must make a gratuitous investment or purchase real estate. In the second case, they have to pay more. But the house or apartment can be resold later. It is allowed to buy real estate from a list prepared by representatives of state agencies. It is better to buy houses in the northern part of the country. They are cheaper.

Thus, this country’s tax system is beneficial for running a private business. It allows for developing a business and getting particular preferences. It is even possible to make money on rent. There are a lot of tourists here, so the demand for apartments and houses is always stably high.

At the same time, Montenegro cannot be classified as a country where people can avoid paying taxes. Here everything works clearly, so people have to be prepared for the fact that they have to pay the bills. It is the only way an honest state works. Also, representatives of the authorities are ready to tell everything about the peculiarities of the taxation system.


Please enter your comment!
Please enter your name here