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Corporate Tax in Montenegro

Corporate Tax in Montenegro

If you open a company in Montenegro, you will have to pay taxes. One of these taxes is the corporate tax in Montenegro, which is imposed on corporations who earn income from sources within and outside the country, depending on the residency of the companies. Resident companies are taxed on income from sources within and outside the country while non-resident corporations are only taxed for income derived from sources within. Currently, companies in Montenegro are subject to 9% corporate tax. The rate is considered as one of the lowest in Europe.

Resident and non-resident corporations in Montenegro

When you open a Montenegro company, it will be considered as a resident if there is an actual company or establishment present in the country. Companies that are established or operated abroad are also considered as resident corporations if their supervision and control is exercised within the country. These types of companies are subject to corporate tax in Montenegro on income from worldwide sources. Corporations that do not have an establishment in the country or are managed and controlled abroad are considered as non-residents. They are only taxed on income from sources within the country.

Coverage of corporate tax in Montenegro

After the process of company formation in Montenegro, your new company will start to operate and it will have to pay taxes for the income earned. The sources of income that are subject to corporate tax in Montenegro are from:

1.    Ordinary business operations or those that are closely related to such operation;
2.    Transfer of real property or arising from immovable property;
3.    Dividends and other forms of income distribution;
4.    Interests;
5.    Royalties;
6.    Other sources

Exemption from Montenegro corporate tax

When you open a company in Montenegro, it does not have to necessarily be subject to tax immediately. Corporate tax in Montenegro is not imposed on:

1.    National and local governments;
2.    Associations relating to public enterprise, tourism, sports clubs, art, and political parties;
3.  Religious organizations, humanitarian entities, charitable institutions, and entities engaged in scientific and educational operations;
4.    Commercial chambers and labor organizations;
5.    Dividends and other types of income distribution received from shares held in resident corporations.

If you need help in opening a company in Montenegro, you can rely on our local agents. We can also handle the EORI registration procedure in Montenegro.

Foreign tax credit in Montenegro

Double taxation treaties concluded between Montenegro and other countries apply also for the corporate tax.  Under these double taxation avoidance agreements, foreign companies are given tax credit for the taxes already paid in their resident country. The credit is only up to the amount of income subject to the corporate tax in Montenegro.

If you need more information on the corporate tax in Montenegro, just get in touch with us. Our experts in company formation in Montenegro can provide you with a lot of useful information.