Montenegro taxes residents on worldwide income and non-residents on Montenegro-source income only. Montenegro operates a self-assessment system for corporate tax, with the Tax Administration conducting post-filing review. Foreign companies headquartered in jurisdictions with preferential tax regimes face a higher 30% withholding tax rate (rather than the standard 15%) on payments received.
The Montenegrin tax year is the calendar year.
Montenegro's headline corporate income tax (CIT) rate is 15%.
The headline personal income tax (PIT) rate is 15%.
The standard VAT/GST (or equivalent consumption tax) rate is 21%.
An individual is a Montenegrin tax resident if they have domicile in Montenegro or their center of personal and economic interests is there, or if they spend at least 183 days in Montenegro in a tax year. Individuals posted abroad to work for a Montenegro-resident entity, individual, or an international organization are also treated as resident. Where a tax treaty applies, its residency rules govern. Residents are taxed on worldwide income (with a foreign tax credit capped at the Montenegrin tax that would apply); non-residents only on Montenegro-source income.
A non-Montenegrin entity has a Montenegro permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Montenegro on the entity's behalf, following the OECD Model Treaty definition as applied under Montenegrin domestic law and any applicable tax treaty.
Montenegro has no CFC rules.
Montenegro has no thin capitalization rules. Interest and related costs on loans from related-party creditors are still generally deductible only where properly documented and business-related.
Montenegro does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. As a non-EU member (EU accession candidate, chairing several regional integration processes through 2026), Montenegro is not bound by ATAD2 and does not have a comprehensive anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Montenegro does not provide a broad participation exemption for foreign dividends in the European sense; relief from double taxation is available primarily through Montenegro's foreign tax credit system and its treaty network.
Montenegro has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Montenegro, capped at the Montenegrin tax otherwise due on that income.
Montenegro has signed double tax treaties with 44 countries, including most of Europe, China, Malaysia, Sri Lanka, and Turkiye. To claim treaty-reduced withholding, a non-resident must provide a tax residency certificate and demonstrate beneficial ownership of the income.