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% to 15% corporate tax. The rates are considered as one of the lowest in Europe.
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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.
Taxation on non-resident corporations in Montenegro
The Montenegrin Corporate Income Tax (CIT) Law outlines specific regulations regarding the taxation of non-residents. These regulations cover:
- Capital gains earned by non-residents from transactions involving other non-resident entities or both resident and non-resident individuals.
- Income sourced from Montenegro that non-residents obtain through leasing movable and immovable properties from parties that are not required to calculate or withhold taxes (including both resident and non-resident individuals or entities).
Non-resident companies must submit their tax return through a tax representative in Montenegro within 30 days of income accumulation. The tax liability will be established based on the ruling provided by the tax authorities in Montenegro.
Find support from our company formation agents in Montenegro in order to take the suitable steps during the registration of your company in Montenegro and the corporate tax aspects.
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:
- Ordinary business operations or those that are closely related to such operation;
- Transfer of real property or arising from immovable property;
- Dividends and other forms of income distribution;
- Interests;
- Royalties;
- Sale of goods produced in Montenegro;
- Provision of services within Montenegro;
- Extraction and use of natural resources;
- Real estate operations located in Montenegro;
- Sale of real estate by a seller based in Montenegro;
- Insurance and reinsurance for risks occurring within Montenegro;
- Other income generated from activities carried out within Montenegro.
If you are planning to open a company in Montenegro in any of the fields mentioned above, you can benefit from the assistance of our specialized company formation experts who can offer relevant support regarding corporate tax regulations in Montenegro and many other aspects of the business industry in this country.
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:
- National and local governments;
- Associations relating to public enterprise, tourism, sports clubs, art, and political parties;
- Religious organizations, humanitarian entities, charitable institutions, and entities engaged in scientific and educational operations;
- Commercial chambers and labor organizations;
- 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.
Corporate tax period and return in Montenegro
The tax period for profit tax in Montenegro is the entire financial year. For a company in liquidation or starting operations partway through the year, the tax period aligns with the calendar year. Profit tax is assessed after the financial year or other applicable period has ended.
A taxpayer must present the submission of the tax return in Montenegro to the relevant tax authority within 3 months of the end of the official tax period in this country. The tax amount declared in the return must also be paid within this timeframe.
Profit and tax numbers in Montenegro
As official data presents, the applicable tax rate in Montenegro is determined by the amount of profit earned, with rates ranging from 9% to 15%. The progressive corporate tax structure is as follows:
- For profits up to the sum of EUR 100,000, the tax rate is 9%;
- For profits between the sums of EUR 100,000.01 and EUR 1,500,000, the tax is calculated as EUR 9,000 plus 12% on the portion of profit exceeding EUR 100,000.01;
- For profits exceeding EUR 1,500,000.01, the tax is EUR 177,000 plus 15% on the portion of profit above EUR 1,500,000.01.
Our experts in company formation can provide efficient support regarding taxes and legal corporate procedures in Montenegro. If you need more information on the corporate tax in Montenegro, just get in touch with us.