This article provides a precise overview of the individual income tax framework in Montenegro as of 2025. You’ll find the current rates, progression structure, and the application of municipal surtaxes, ideal for international professionals evaluating tax environments.
Individual Income Tax Framework in Montenegro (2025)
Montenegro applies a progressive individual income tax system. Tax rates increase as income rises, and both base tax and surtaxes apply depending on your municipality of residence and work. The currency used is the euro (€), and income tax is assessed based on total income earned by individuals.
2025 Individual Income Tax Brackets
| Income Range (€, EUR) | Tax Rate (%) |
|---|---|
| €0 – €700 | 0% |
| €701 – €1,000 | 9% |
| €1,000.01 and above | 15% |
As shown in the table above, the first €700 of income is tax-exempt. Earnings between €701 and €1,000 are taxed at 9%. For income exceeding €1,000 per month, a higher rate of 15% applies for the portion above this threshold.
Municipal Surtaxes in Montenegro
On top of the basic income tax, a municipal surtax applies and varies depending on your locality:
| Municipality | Surtax Rate (%) | Details |
|---|---|---|
| Podgorica, Cetinje | 15% | Applies to all taxable income within these municipalities |
| All other municipalities | 13% | Standard surtax for rest of Montenegro |
For those residing or working in Podgorica or Cetinje, a 15% municipal surtax is imposed, whereas all other areas impose a 13% surtax. These are calculated on the same taxable base as the individual income tax.
Assessment Basis and Calculation
Income tax is based on total income accrued from various sources during the calendar year. Relevant income includes wages, business income, investments, and other taxable earnings, assessed progressively according to the brackets listed above. Note that, as of 2025, updated official documentation does not specify a minimum or maximum holding period for income tax computations.
Summary Table: 2025 Montenegrin Income Tax and Surtax
| Income Range (€, EUR) | Income Tax Rate (%) | Municipal Surtax (All Municipalities Except Podgorica/Cetinje, %) | Municipal Surtax (Podgorica/Cetinje, %) |
|---|---|---|---|
| €0 – €700 | 0% | 13% | 15% |
| €701 – €1,000 | 9% | 13% | 15% |
| €1,000.01 and above | 15% | 13% | 15% |
Pro Tips for Navigating Montenegrin Income Tax
- Review your municipality’s surtax rules annually to ensure you’re factoring in the right local rate, as different cities apply different surtaxes on top of national rates.
- Be sure to track your monthly income thresholds closely; earning just above €1,000 triggers the higher 15% rate for that income slice.
- Keep detailed records of all income streams throughout the year. This clarity is essential for accurate assessment and audit requests.
- If your residence status or primary working municipality changes, update your tax status immediately to avoid over- or underpayment due to varying surtax rates.
- For international incomes, always check for double taxation agreements or local relief, which can impact your liability in Montenegro.
Official Information and References
For the latest updates and extended guidance on Montenegrin taxation, please consult the official Ministry of Finance website: https://www.gov.me/en/ministry-of-finance
Montenegro’s individual income tax environment in 2025 is characterized by progressive rates and municipality-level surtaxes. The clear regional distinctions in surtax rates reinforce the importance of your main place of residence or work. As always, keeping complete records and staying alert to regulatory updates ensures compliance and financial efficiency.