One of the strongest and most developed investment sectors in Montenegro is tourism. With this in mind, the Montenegrin government is making determined steps to secure further development of high level tourism. One of the latest measures is the adopting of legislation which regulates the application of a reduced VAT rate (7%). Until recently, only accommodation was subject to the reduced rate. As of August 2016, however, the full service in four-star hotels located in northern Montenegro, as well as full service of all hotels in the central and southern parts of Montenegro, are subject to the reduced 7% VAT.
In addition to strengthening tourism development, Montenegro's government has aimed at creating an environment of easier use of international grants and credit funds from international financial institutions and foreign countries by adopting laws that define zero-rated VAT for purchased goods and serviced financed by relevant funds.
As of January 1 2017, the Montenegro business community will see redefinition of withholding tax. Even though the standard withholding tax rate remains the same (9%), from 2017 withholding tax will be calculated, deducted and paid in cases of purchase of used goods, semi-products as well as agriculture products. To eliminate certain doubts that the business community had related to the implementation of withholding tax, corporate income tax law was further amended to define in detail the terms related to interests, intellectual property, dividends, consulting services, marketing research and financial audit.
Jelena Zivkovic (firstname.lastname@example.org), Eurofast Global, Podgorica office, Montenegro
Ernst & Young Montenegro d.o.o.
Serdara Jola Piletica bb
PC Palada, II floor
Tel: +382 20 238 477
Adriatic Market Segment Leader
Tel: +36 1 451 8602
Country Tax Leader
Tel: +381 11 2095 794
|Corporate Income Tax||9%|
|Capital Gains Tax||9%||A|
|Net Operating Losses (years)|
|Royalties from, for example, patents, know-how||9%||C|
|Branch Remittance Tax||0%|
A Capital gains are included in a taxpayer's total income and taxed at 9%.
B The withholding tax rates may be reduced if a favourable double tax treaty exists (DTT).
C The withholding tax rate paid to non-residents, unless the rate is reduced by the DTT.