Taxes in Montenegro

One of Europe's lowest tax rates (9-15%). Strategies for freelancers, retirees, and business owners.

Why everyone talks about the "9-15%"

Montenegro used to have a flat 9% tax. It is now Progressive, but still incredibly low compared to the EU.

Incomes under €700/mo

0% Used to be

Non-taxable threshold

Standard Rate

15%

For most corporate profit

Dividend Tax

15%

Withholding tax

Tax Residency

You become a tax resident if you spend 183+ days in Montenegro in a calendar year OR if your "center of vital interests" is here.

For US Citizens (FATCA)

Montenegro banks are compliant with FATCA. They WILL report your accounts to the IRS. You must still file your US taxes (FBAR/1040) even if you live here.

VAT (PDV)

Value Added Tax is included in the price of almost everything you buy.

21%

Standard rate regarding most goods and services.

7%

Reduced rate for basic foods (bread, milk), medicines, and books.

For Businesses: If your company turnover exceeds €30,000 in 12 months, you MUST register for VAT.

Freelancers: "Paušal"

For small business owners and freelancers, the Paušalno oporezivanje (Lump-sum taxation) is a magic word.

No Bookkeeping: You don't need to track every expense receipt.
Fixed Monthly Cost: You pay a flat rate covering tax and social contributions (often ~300€ - 400€/mo depending on profession).
Limit: Only available if annual turnover is under €18,000.