Page 38 - Mazars Central and Eastern European tax guide 2023

Montenegro The general rate is 21%, the reduced rate is 7% (e.g., (taxed at a rate of 9% or 15%). There is also a flat rate
bread, milk, accommodation services, medications,
of 15%, which is applicable for other sources of income
tourist rent, restaurants and catering services except (e.g., capital gains, interest, etc.).
alcoholic beverages), and there is VAT-exemption for Active incomes fall under the scope of the SSC system:
donations, exports and banking services. Taxpayers with an individual’s social contributions equal 15,5% altogether.
revenue in excess of EUR 30,000 must register for VAT
Mazars d.o.o. Belgrade purposes. The options/limits are based on the VAT Act These include contributions for pensions (15%) and
11070 – Belgrade, in Montenegro. unemployment (0.5%). The employer’s contribution
Bulevar Milutina Milankovica 11g, is at a rate of 6.4% of an employee’s salary. This includes
Serbia Personal income tax / Social security system pensions (5.5%) and unemployment insurance (0.5%),
Phone: (00381) 63 244 276 contributions to the Labour fund (0.2%) and Labour union
Fax: (00381) 63 293 102 In Montenegro, resident individuals are taxed based fund (0.2%). Also, local surtax, which is calculated on PIT
www.mazars.rs on their worldwide income, and non-residents are taxed assessed, is paid by the employer to the municipality
only on income derived from Montenegro. Montenegro has of the taxpayer’s seat. Surtax rates range from 10% to15%,
progressive taxation for salaries (taxed at the rate of 0% / depending on municipality, with most municipalities
9% / 15%) and income stemming from self-employment having a 13% rate.
Corporate taxes and other direct taxes in manufacturing in economically underdeveloped Average wage
municipalities. The total amount of the tax exemption Wage related taxes in Montenegro Minimum wage
Since FY2022, corporate income tax rate is progressive may not exceed EUR 200,000 for a period of eight years. in private sector
and dependent on taxable profits realized (compared In Montenegro, there are no specific thin capitalization in EUR in EUR
to the 9% flat rate that had been previously applicable) and rules, except that interest paid to a non-resident must
it applies to both resident and non-resident companies. be on arm’s length terms. 533 880
Resident companies are taxed on their worldwide income, Total wage cost 567 106.00% 938 106.00%
while non-residents are taxed only on income generated Withholding tax at the rate of 15% (compared to the Employer's contributions 34 6.00% 58 6.00%
in Montenegro. The tax base is the pre-tax profit modified previously applied 9%) is applicable to dividends, interests,
by several increasing and decreasing items. Capital gains capital gains, royalties and other intellectual property Gross salary 533 100.00% 880 100.00%
are included in the annual corporate profits tax return and rights, fees for the lease of movable and immovable Employees' contributions 82 6.00% 16 6.00%
are subject to 15% tax (compared to 9% in previous years). property, consulting services, market research and audit Personal income tax – 0.00% 137 0.00%
In Montenegro, losses can be carried forward for 5 years services, which are paid to a non-resident legal entity. Surtax 1 0.40% 4 0.40%
while the carry back of losses is not permitted. Montenegro has a wide international treaty network with
over 40 double tax treaties. Net salary 450 84.51% 727 82.66%
A tax incentive (profit tax rate for the first eight years
is 0%) is given to newly founded legal entities engaged A transfer tax of 3% is levied on the transfer of immovable
property. There is no surtax or alternative minimum taxes.
Property tax is levied on the ownership/use of property
Transfer pricing in Montenegro at rates ranging from 0.25% to 1% for real estate that is the
residence of the taxpayer. Secondary real estate (not used
Arm’s length principle ü Since 2002 as a residence) is taxed at rates ranging from 0.3% to 1.5%.
Yes for large taxpayers Illegally built objects are taxed at between 0.3% and 2%,
(revenues over EUR 10m).
Documentation liability ü Others must submit whereas undeveloped construction land is taxed at 0.3%
on request. to 5% range.
APA No – VAT and other indirect taxes
Country-by-Country –
liability No
Master file-local file VAT options in
(OECD BEPS 13) No – Applicable / limits
applicable Montenegro
Penalty Distance selling No
lack of documentation ü ü Call-off stock No
tax shortage No Not specifically stated. VAT group registration No
The parties between whom Cash accounting – yearly
special relations exist, which amount in EUR (approx.) No
could directly impact the
Related parties 25% <
conditions or economic Import VAT deferment No
results of the transaction Purchase of electricity, heating
between them. Local reverse charge gas and other heating and cooling
Corporate Income Tax Law energy procured for further supply.
envisions safe harbour rules Option for taxation
in relation to intercompany Pere Mioč
Safe harbours ü loans and interest rates. letting of real estate No
The safe harbour rate for Partner, Tax Advisory Services
FY23 is set at 3.98% p.a. supply of used real estate No Phone: +385 (0)1 4864 424
Level of attention paid by Tax VAT registration EUR 30,000/year Mobile: +385 (0)99 736 8746
Authority 5/10 threshold E-mail: pere.mioc@mazars.hr

38 Mazars Central and Eastern European tax guide 2023 Central and Eastern European tax guide 2023 Mazars 39