Detailed Guide to Tax Obligations in Montenegro for 2024

Starting a business in Montenegro requires you to follow steps to ensure your operation is legally
compliant. In this comprehensive guide, we’ll cover everything you need to know about procedures you
need to follow to run your business according to Montenegrin laws.

1. TAX AND CONTRIBUTIONS ON SALARIES

As an employer in Montenegro, you must pay taxes and contributions towards the health and pension
insurance for your employees, including the Executive Director:

• MINIMUM SALARY: The minimum full-time salary is set at €450.00.
• TAX AND CONTRIBUTIONS: For this minimum salary, the mandatory taxes and contributions total approximately €120.00.
• OBLIGATIONS START: Tax obligations begin on the day when the employee's residence permit is granted.
• PAYMENT SCHEDULE: These taxes and contributions must be paid by the 15th of the following month.
• BUSINESS EXPENSES: These contributions are considered business expenses and will reduce both your taxable profit and profit tax.

Keep in mind that if employees receive a salary increase, their taxes will rise progressively, affecting both the employer’s contribution and the employee’s net income.

2. VALUE-ADDED TAX (VAT)

• VAT REGISTRATION: You must register for VAT if your annual turnover exceeds €30,000.00.
• VAT RATE: The standard VAT rate in Montenegro is 21% on most goods and services, with certain exceptions that can be clarified as needed.
• PAYMENT DEADLINES: VAT payments are due by the 15th of each month for the previous month's activities.

3. PROFIT TAX

Montenegro's profit tax system is tiered based on annual net profit:

• UP TO €100,000.00: The profit tax rate is 9% of net profit.
• FROM €100,000.01 TO €1,500,000.00: The tax is a fixed €9,000.00 plus 12% of the amount over €100,000.01.
• ABOVE €1,500,000.01: The tax is a fixed €177,000.00 plus 15% of the amount over €1,500,000.01.
• DEADLINE: Profit tax must be paid by the 31st of March of the following year.

4. DIVIDEND TAX

Upon concluding the business year and generating a profit, the dividend tax is:

• TAX RATE: The dividend tax is 15% on the gross amount, with an additional surtax which totals about 20% on the net amount.
• ANNUAL REPORT: After preparing the annual report, any declared profit can be transferred to your private account, subject to these taxes.

5. FISCALIZATION

All invoices in Montenegro must be issued through specialized fiscal software:

• INVOICE REQUIREMENTS: All invoices must be issued using specialized fiscal software that includes a QR code.
• REAL-TIME REPORTING: This software transmits data to the Tax Office via QR code, enabling real-time online monitoring of issued invoices.

This guide ensures that compliance with tax and fiscal obligations makes your business operations in Montenegro both compliant and efficient. Understanding and adhering to these requirements will help lay a solid financial foundation for your business, whether you are a local entrepreneur or an international investor.

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Don’t wait—get in touch now to optimize your tax obligations and secure your business’s financial future!