04. 04. 2025.
WHAT IS A DIVIDEND?
Profit, as a financial result of the company's operations at the end of the business year, represents the positive difference between income and expenses, which is determined in the financial report of that company. The profit determined in this way represents the realized business result and is treated as taxable profit. Taxable profit is the basis of the profit tax, that is - on the determined profit, the corporate profit tax is paid at the rate of 9, 12 and 15%, depending on the amount of profit.
After you pay the corporate income tax, the net profit remains. The company owner cannot use this profit for personal purposes, because it is the company's profit, not his personal profit. If he wants to use the company's profit for his personal purposes, he has to pay tax and surcharge on the income from participation in the profit - that is. dividend tax.
WHO IS ENTITLED TO A DIVIDEND?
Company members have the right to receive dividends based on the decision on the distribution of company profits.
PAYMENT OF DIVIDENDS TO INDIVIDUALS
When a legal entity pays a dividend to natural persons (whether they are residents or non-residents of Montenegro), that dividend is taxed at a rate of 15% on the gross amount.
PAYMENT OF DIVIDENDS TO FOREIGN LEGAL ENTITIES
When dividends are paid to a foreign legal entity, that income is taxed. That dividend is taxed at a rate of 15% on the gross amount. The tax rate may be different for foreign individuals and legal entities with the application of an international treaty on the avoidance of double taxation.
TAX AND SURCHARGE ON DIVIDEND
In order for the owner to be able to use the company's profit for personal purposes (to withdraw the profit or to transfer it to a personal account), he must first pay the dividend tax, which is 15% on the gross amount of profit and the dividend tax surcharge (on the tax base 10% - 15% depending on the municipality).
Total tax + surcharge on dividends amount to 18%-20% on the net amount of transferred or raised profit, depending on the municipality where the company is registered.
For example in order to withdraw 1,000.00 euros from the bank account of the company as profit of the owner, you have to pay from 180.00 to 200.00 euros.
