The value added tax (VAT) is 21%. Despite this fairly high rate, prices on everyday consumer products and services remain between 35 to 60% cheaper than Western Europe.
The tax on company profits is at the rate of 9% up to 100,000 euros, 12% from 100,000.01 to 1,500,000 euros and finally 15% above 1,500,000 euros. If you wish to benefit from dividends then they will be taxed at the rate of 15%.
Regarding withholding taxes, dividends are taxed at 15%, interest at 15% if paid to a non-resident entity and 5% if paid to a non-resident individual.
As an employer, the social contributions (2019 data) to be paid are:
– 4.3% for health insurance
– 0.5% for the unemployment insurance fund
– 9.8% for pension and disability contributions
In the less developed areas of the country under certain conditions, salaries paid to employees of a start-up are exempt from taxes.
Royalties are taxed at the rate of 15%.
Employee income is taxed at 0% and up to 11% maximum.
For the acquisition of an old property, there is a purchase tax of 3% of the purchase price.
Rental income is taxed at 15% after a 30% reduction.
In Montenegro, the retirement pensions of resident foreigners can be exempt from taxes or benefit from low taxation through legal arrangements which are not accessible to retired civil servants, it should be noted.
The property tax on a property represents between 0.25% and 1% of the value of the property.
Example for a house of 50 square meters with sea view, located in Luštica 350 meters from the beach, the price is 194€.
The tax on the capital gain of real estate in the context of a resale is at the rate of 15%.
