Taxes and Tax Schemes in Montenegro | What You Need to Know in 2025

Montenegro, a Balkan nation known for its stunning coastline and growing investment potential, operates one of Europe's most competitive tax systems. Located on the Adriatic Sea with strategic access to both European and Mediterranean markets, Montenegro combines attractive tax rates with increasing economic opportunities, making it increasingly popular for international investors and digital nomads.

The country's economy, driven by tourism, services, and a growing tech sector, has shown significant development in recent years. Montenegro's tax system balances attracting foreign investment with maintaining stable government revenues. Recent reforms have focused on digitalizing tax administration and enhancing benefits for foreign investors.

The expat community in Montenegro is expanding, with many professionals drawn to sectors like tourism, real estate development, and digital services. The tax system, characterized by its simplicity and low rates, offers various benefits and exemptions that can significantly impact an expat's financial planning.

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Montenegrin Income Tax

Montenegro employs a progressive income tax system with relatively low rates. Tax residents face the following income tax brackets (as of 2025):

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Social security contributions are significant:

• Pension Insurance: 15.5% (employee) and 5.5% (employer)
• Health Insurance: 8.5% (employee) and 4.3% (employer)
• Unemployment Insurance: 0.5% (employee) and 0.5% (employer)

If you want to have a better understanding of the taxes you should pay on personal income in Montenegro, you can use the personal tax calculator in the Taxation section of the Montenegro page.

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Montenegrin Tax on Overseas Income

Montenegro's treatment of foreign income follows a worldwide income principle:

• Tax Residents: Taxed on worldwide income
• Non-residents: Taxed only on Montenegrin-source income
• Foreign Tax Credits: Available to avoid double taxation

The system includes provisions for avoiding double taxation through treaties and unilateral relief.

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Montenegrin Tax on Investments

Investment income in Montenegro receives specific treatment under tax law:

• Capital Gains: 9% flat rate
• Dividends: 9% withholding tax
• Interest Income: 9% withholding tax
• Rental Income: Taxed at progressive rates with deductible expenses

The system includes special provisions for investment in development projects and strategic sectors.

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Montenegrin Corporate Taxation

Corporate taxation in Montenegro is highly competitive:

• Corporate Income Tax: 9% flat rate
• Value Added Tax (VAT): 21% standard rate, 7% reduced rate
• Property Tax: 0.1% to 1% depending on location and use
• No withholding tax on outbound dividends to non-residents

Special incentives exist for investments in underdeveloped regions and priority sectors.

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Special Tax Regimes

Montenegro offers several special tax arrangements beneficial to international residents:

Citizenship by Investment Program: Tax benefits for qualifying investors.

Economic Citizenship: Special provisions for significant investments.

Digital Nomad Visas: Simplified tax treatment for remote workers.

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Regional Comparison

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Tax Planning for Montenegro

Effective tax planning in Montenegro requires attention to several key areas:

Residency Planning: Understanding the 183-day rule and its implications.

Investment Structure: Utilizing available investment incentives.

Business Location: Taking advantage of regional development incentives.