Montenegro: Amendments to individual and corporate income tax laws

Amendments to individual and corporate income tax laws were enacted and are effective 30 December 2022

Amendments to individual and corporate income tax laws

Amendments to the individual and corporate income tax laws were enacted following publication in the official gazette (152/2022 dated 30 December 2022) and are effective 30 December 2022.

Individual (personal) income tax

Benefits provided to individuals not employed by the payer are considered other income (rather than individual (personal) income). The payer must calculate, withhold and pay income tax simultaneously with the payment of such income at the proportional rate of 15%.

The following categories are exempted from individual (personal) income tax and payment of social security contributions:

  • Beneficiary of incentives for the development of research and innovation, for an employed or engaged person and for an independent entrepreneur, in accordance with the law regulating incentives for the development of research and innovation
  • A person earning individual (personal) income or an entrepreneur earning income from an employer that is not registered in Montenegro, provided such person has the status of a digital nomad in accordance with the law governing the residence and work of foreigners

An anti-abuse norm is introduced for assessment of the capital gains tax base on sales of shares in a legal entity. If the sale price of shares in a legal entity is lower than the market value, the sales price for capital gains tax purposes is determined by the tax authority.

The scope of tax on income from self-employment/entrepreneurship is further defined. 

Corporate income tax

The obligation to pay withholding tax on payments made on the basis of a loan, with or without interest, made by corporate income taxpayer to individuals is introduced. Withholding tax is calculated and paid at the time of loan payment at a rate of 15% on the gross amount paid.

  • A corporate income taxpayer who concluded a loan agreement with an individual (with or without interest) before the effective date of this amendment to the law, is obliged to calculate and pay withholding tax after the expiration of the period for which the agreement was concluded, if they conclude annex to the contract extending that loan period.
  • The withholding taxpayer must file a tax return no later than end of February of the current year for payments made during than previous year.

Read a January 2023 report [PDF 438 KB] prepared by the KPMG member firm in Montenegro


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