Tax laws Montenegro
Montenegro's tax system is designed to align with European Union standards, featuring various taxes, including personal and corporate income taxes, value-added tax (VAT), and social security contributions.
1. Personal Income Tax (PIT):
Progressive Rates: As of 2023, Montenegro applies a progressive tax system to personal gross income:
9% Rate: Applicable to monthly gross income exceeding €700.
15% Rate: Applicable to monthly gross income exceeding €1,000.
Municipal Surcharge: Municipalities impose an additional income tax surcharge of 13% to 15% on the national tax rate.
Social Security Contributions: Totaling 15.5%, with 6% borne by the employee.
2. Corporate Income Tax (CIT):
Flat Rate: Montenegro imposes a flat CIT rate of 9% on corporate profits.
Capital Gains: Considered part of taxable income and taxed at the standard CIT rate.
3. Value-Added Tax (VAT):
Standard Rate: The VAT rate is 21%, in line with EU guidelines.
Reduced Rates: A 7% rate applies to specific items, including essential goods and services.
4. Fiscalization System:
- Implementation: Since June 1, 2021, Montenegro has enforced a software-based fiscalization system requiring businesses to issue receipts through electronic cash registers that communicate in real-time with tax authorities.
5. Trade Agreements:
- Free Trade Agreements: Montenegro has agreements with several countries, including those in the Central European Free Trade Agreement and the European Free Trade Association, facilitating trade with EU countries and others.
6. Minimum Wage:
- Recent Increase: The minimum wage increased from €331.30 per month in 2019 to €532.50 per month in 2022.
Note: Tax laws and regulations are subject to change. For the most current information, consult Montenegro's tax authorities or seek professional tax advice.
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