Personal Income Tax 2026 — Montenegro

Salaries up to €700 gross monthly are completely exempt from income tax. This is the highest tax-free threshold in Europe.

Only the amount exceeding €700 is taxed at 9%. For example, on a €900 salary, tax is paid on €200 (€900 - €700).

Maximum rate of 15% applies to entire salary above €1,000. Still one of the lowest rates in Europe.

First €8,400 of annual income from individual entrepreneurial activity is not taxed. Significant benefit for small entrepreneurs.

Income in this range is taxed at 9%. Preferential rate for beginning entrepreneurs.

Entrepreneurial income above €12,000 is taxed at maximum rate of 15%. Progressive scale encourages small business.

Dividends from Montenegrin and foreign companies are taxed at a flat 15% rate. Withheld upon payment.

Interest income is taxed at 15% for residents. Non-residents pay 5% - preferential rate to attract foreign capital.

Capital gains from sale of assets taxed at 15%. Important: assets held for more than 1 year are tax-exempt.

Rental income taxed at 15% after expense deductions. Standard deduction: 30% for long-term, 50-70% for short-term rentals.

Municipalities charge a surtax on income tax. In capital Podgorica and Cetinje, the rate is 15% of income tax paid.

In all other regions of Montenegro, the municipal surtax is 13% of income tax amount. Lower than in major cities.