Taxation in Montenegro: A Practical Guide
Corporate Income Tax, Personal Income Tax, dividends and practical examples - explained clearly.
This guide gives a straightforward overview of several common tax calculations in Montenegro. It covers Corporate Income Tax (CIT), Personal Income Tax (PIT), dividends and municipal surtax, with practical examples based on AFG’s Summer 2026 taxation reference. It explains the basic calculation logic and is not a substitute for individual tax or accounting advice.
Last reviewed: 16 September 2026 | Content basis: AFG Taxation in Montenegro - Summer 2026
Taxation in Montenegro at a glance
CORPORATE INCOME TAX (CIT)
9% 12% 15% progressive rates applied to taxable profit.
PERSONAL INCOME TAX (PIT) - SALARY
0% 9% 15% monthly tax bands: First EUR 700 at 0%;
next EUR 300 at 9%;
the rest above EUR 1,000 at 15%.
ENTREPRENEUR / SELF-EMPLOYED PIT
DIVIDENDS TO AN INDIVIDUAL
15% PIT, municipal surtax is then calculated on the PIT amount.
MUNICIPAL SURTAX
15% in Podgorica and Cetinje. 13% in the other municipalities.
0% 9% 15% annual tax bands: First EUR 8,400 at 0%;
next EUR 3,600 at 9%;
the rest above EUR 12,000 at 15%.
How to read this guide
A few useful terms.
TAX RESIDENT
CIT - CORPORATE INCOME TAX
How to read the results
• Starting amount = 100% of the income or profit used in the example.
• Total tax shown = total tax in euros and the percentage it represents.
• Amount left = what remains after the taxes shown, in euros and as a percentage.
MUNICIPAL SURTAX
A person who is treated as resident in Montenegro for tax purposes. Spending at least 183 days in Montenegro is one common basis for tax residence, although other residence rules can also apply.
DIVIDEND
An additional local tax calculated as a percentage of Personal Income Tax (PIT). The AFG examples use 15% for Podgorica and Cetinje.
Money distributed by a company to its shareholder(s) from company profit.
PIT - PERSONAL INCOME TAX
Tax paid by an individual on income, for example salary, business income or dividends.
TAXABLE PROFIT
Tax paid by a company on its taxable profit.
The company profit amount used to calculate Corporate Income Tax (CIT).
Personal Income Tax (PIT) - Salary
CASE A - SALARY
CASE A - SALARY => RESULT
This example assumes social contributions have already been deducted; it shows only Personal Income Tax (PIT) and municipal surtax.
Annual salary:
EUR 42,000.00 (100.00%)
Personal Income Tax (PIT):
EUR 4,824.00 (11.49%)
Municipal surtax:
EUR 723.60 (1.72%)
Total PIT + Surtax:
EUR 5,547.60 (13.21%)
AMOUNT REMAINING: EUR 36,452.40 (86.79%)
Annual salary: EUR 42,000 (EUR 3,500 per month)
Example: director or employee of a Montenegrin company, with salary only and no dividends.
Personal Income Tax (PIT) rates used
• First EUR 700 per month: 0%
• Part from EUR 700.01 to EUR 1,000: 9%
• Part above EUR 1,000: 15%
STEP 1 - PERSONAL INCOME TAX (PIT)
• EUR 700 x 0% = EUR 0
• EUR 300 x 9% = EUR 27
• EUR 2,500 x 15% = EUR 375
• Monthly PIT total = EUR 402 (Annual PIT = EUR 4,824)
STEP 2 - MUNICIPAL SURTAX
EUR 4,824 x 15% = EUR 723.60
Personal Income Tax (PIT) - Entrepreneur / Self-employed
CASE B - ENTREPRENEUR / SELF-EMPLOYED
CASE B - SELF-EMPLOYED / ENTREPRENEUR => RESULT
Taxable business income means the amount after deductible business expenses - not total sales or turnover.
Taxable business income:
EUR 70,000.00 (100.00%)
Personal Income Tax (PIT):
EUR 9,024.00 (12.89%)
Municipal surtax:
EUR 1,353.60 (1.93%)
Total PIT + Surtax:
EUR 10,377.60 (14.83%)
AMOUNT REMAINING:
EUR 59,622.40 (85.17%)
Annual taxable business income: EUR 70,000
Example: an individual doing business in their own name.
The EUR 70,000 figure is the income left after deductible business expenses, not total sales or turnover.
Personal Income Tax (PIT) rates used
• First EUR 8,400 per year: 0%
• Part from EUR 8,400.01 to EUR 12,000: 9%
• Part above EUR 12,000: 15%
STEP 1 - PERSONAL INCOME TAX (PIT)
• EUR 8,400 x 0% = EUR 0
• EUR 3,600 x 9% = EUR 324
• EUR 58,000 x 15% = EUR 8,700
Annual PIT = EUR 9,024
STEP 2 - MUNICIPAL SURTAX
EUR 9,024 x 15% = EUR 1,353.60
SALARY + DIVIDENDS
PART 1 - SALARY
• Annual salary: EUR 60,000 (EUR 5,000 per month)
• Annual PIT: EUR 7,524.00
• Annual municipal surtax: EUR 1,128.60
Total tax on salary:
EUR 8,652.60 (14.42%)
AMOUNT REMAINING:
EUR 51,347.40 (85.58%)
Starting amounts: EUR 60,000 salary + EUR 50,000 dividends = EUR 110,000 total income. Example: a director or employee who is also a shareholder of a Montenegrin company.
Percentages in the combined result are calculated against the full EUR 110,000 of salary + dividends.
CASE C - SALARY + DIVIDENDS
PART 2 - DIVIDENDS
• Dividend amount: EUR 50,000
• Tax on dividends: EUR 7,500.00
• Municipal surtax: EUR 1,125.00
Total tax on dividends:
EUR 8,625.00 (17.25%)
AMOUNT REMAINING:
EUR 41,375.00 (82.75%)
PART 3 - COMBINED RESULT - SALARY + DIVIDENDS
• Annual salary + dividends amount: EUR 110,000
• Tax on salary: EUR 8,652.60
• Tax on dividends: EUR 8,625.00
Total annual tax:
EUR 17,277.60 (15.71%)
AMOUNT REMAINING:
EUR 92,722.40 (84.29%)
Corporate Income Tax (CIT)
CALCULATE YOUR OWN TAXABLE PROFIT
Use the AFG Corporate Income Tax Calculator to enter a taxable-profit amount and see the tax, effective rate and profit remaining after CIT.
Corporate Income Tax (CIT) is calculated on taxable profit, not turnover. Montenegro uses progressive CIT rates:
• Taxable profit up to EUR 100,000: 9%
• Taxable profit on the portion from EUR 100,000.01 to EUR 1,500,000: 12%
• Taxable profit on the portion above EUR 1,500,000: 15%
Three CIT examples
These examples show the CIT calculation only. A company’s taxable profit can differ from its accounting profit after tax adjustments, deductions and other applicable rules.
CASE D - TAXABLE PROFIT OF EUR 70,000
• EUR 70,000 x 9% = EUR 6,300
Total Corporate Income Tax (CIT): EUR 6,300.00 (9%)
PROFIT AFTER CIT: EUR 63,700.00 (91.00%)
CASE E - TAXABLE PROFIT OF EUR 270,000
• EUR 100,000 x 9% = EUR 9,000
• EUR 170,000 x 12% = EUR 20,400
Total Corporate Income Tax (CIT): EUR 29,400.00 (10.89%)
PROFIT AFTER CIT: EUR 240,600.00 (89.11%)
CASE F - TAXABLE PROFIT OF EUR 3,000,000
• EUR 100,000 x 9% = EUR 9,000
• EUR 1,400,000 x 12% = EUR 168,000
• EUR 1,500,000 x 15% = EUR 225,000
Total Corporate Income Tax (CIT): EUR 402,000.00 (13.40%)
PROFIT AFTER CIT: EUR 2,598,000.00 (86.60%)
What these examples assume
• Individual examples assume Montenegrin tax residence. Spending at least 183 days in Montenegro is one common test, but other residence criteria can also apply.
• The examples use a 15% municipal surtax for Podgorica and Cetinje; the AFG 2026 reference uses 13% for other municipalities.
• Social contributions are assumed already deducted in the salary examples; the figures below show PIT and municipal surtax only.
• The examples are simplified and are intended to explain the calculation logic, not to replace individual tax or payroll advice.
The actual tax position can change depending on the taxpayer, the source of income, available deductions, international tax treaties and other facts.
Keep in mind
Download the full AFG tax guide
AFG - TAXATION IN MONTENEGRO
Examples for Individuals and Companies Summer 2026
9 pages | PDF
Prefer a printable version? The full 9-page AFG publication brings the examples together in one PDF for easy reference.
Sources and last reviewed
Last reviewed: 16 September 2026
Law on Corporate Income Tax - Tax Administration / Government of Montenegro
Law on Personal Income Tax - Tax Administration / Government of Montenegro
Tax Residency Guidance - Government of Montenegro
Law on Financing of Local Self-Government - Ministry of Finance / Government of Montenegro
AFG - Taxation in Montenegro - Summer 2026 - Adriatic Finance Group
SOURCE NOTE
This page combines AFG’s Summer 2026 examples with official Montenegrin sources. The examples use a 15% municipal surtax for Podgorica and Cetinje and 13% in other municipalities. Tax residence can depend on more than the 183-day test.
Related AFG Resources
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MONTENEGRO BUSINESS RESOURCES
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CORPORATE INCOME TAX CALCULATOR
Calculate Montenegro CIT on a taxable-profit amount and see the effective rate and profit remaining after tax.
Need help applying Montenegro tax rules to your business?
AFG can help you understand the practical tax and accounting implications of operating in Montenegro and coordinate the next steps with local specialists.
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