Lump-Sum Taxation for Entrepreneurs
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Guide to lump-sum taxation for entrepreneurs in Montenegro. Fixed monthly amount, €30,000 turnover threshold (since 1 Jan 2025), ZPO form by the end of January, approval process.
Key facts
- Lump-sum turnover threshold: up to €30,000 a year (since 1 Jan 2025).
- ZPO form is due by end of January; new businesses: 5 days after registration.
- Not available to lawyers, accountants, consultants, trade or VAT payers.
- The Tax Administration issues the lump-sum decision within 15 days.
Procedure
An entrepreneur qualifies if turnover in the previous year did not exceed €30,000 (Art. 49(1) of the Personal Income Tax Law — the threshold was raised from €18,000 to €30,000 on 1 January 2025, Off. Gazette 88/24). Lump-sum taxation is not allowed for the activities excluded in Art. 49(9) (e.g. lawyers, accountants, consultants, trade, hospitality etc.), nor for entrepreneurs who are VAT-registered (Art. 49(12)).
The €30,000 threshold refers to total annual turnover (not profit).
By law, the ZPO form (Application for Lump-Sum Taxation) is filed by the end of January of the year for which the tax is assessed (Art. 49(4), amended by Off. Gazette 88/24); those who start business during the year file within 5 days of registration. The form contains activity details and estimated turnover.
The Tax Administration's own tax calendar (November 2025 version) still quotes the old deadline — 31 December of the previous year. The law (end of January) prevails, but if you want to avoid any doubt, file by 31 December.
The Tax Authority issues a decision within 15 days setting the monthly lump-sum tax amount based on the type of activity, location, and other criteria.
After receiving the decision, the entrepreneur pays 1/12 of the annual lump-sum tax — by the end of the current month for the previous month (Art. 49(3)). Seasonal lump-sum taxpayers (activity up to 6 months) pay by the 5th of the month for the current month (Art. 49(8)). In addition to tax, contributions for own insurance are due: pension 10% + unemployment 1% (Contributions Law Art. 15(2) and 18(2)), within the same deadline.
The lump-sum amount does not change during the year unless circumstances change.
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Lump-sum vs regular taxation
| Criterion | Lump-sum | Regular |
|---|---|---|
| Turnover threshold | Up to €30,000/yr (since 1 Jan 2025) | No limit |
| Tax calculation | Fixed monthly amount | 9-15% on taxable income |
| Bookkeeping | Income book only | Full accounting |
| Expense deductions | No | Yes |
Additional notes
If turnover exceeds €30,000 during the year, the entrepreneur loses lump-sum status and switches to regular taxation (on actual income).
Lump-sum taxation is suitable for small entrepreneurs with low operating costs.
Contributions for own insurance (pension 10% + unemployment 1%) are paid in addition to the lump-sum tax, by the end of the month for the previous month.
Required Documents
- ZPO form (application for lump-sum taxation)
- Entrepreneur registration certificate
- Tax Authority decision on lump-sum amount
Legal Basis
- Law on Personal Income Tax — consolidated text (Art. 49: lump-sum taxation)
- Amendments to the Personal Income Tax Law, Off. Gazette 88/24 (€30,000 threshold, ZPO by end of January — from 1 Jan 2025)
- Amendments to the Personal Income Tax Law, Off. Gazette 160/25 (applies from 1 Jan 2026)
- Law on Compulsory Social Insurance Contributions (Art. 15 and 18 — entrepreneurs' contributions)
Competent Institutions
- Tax Administration of Montenegro
Lump-sum approval, amount determination