Income Tax in Montenegro
https://eporezi.me/en/vodici/porez-na-dohodak
Complete guide to calculating and filing personal income tax in Montenegro. Rates 0/9/15%, personal allowance €700, surtax 10-15%, contributions 10.5%.
Key facts
- Rates 0/9/15 %; personal allowance €700 a month (€8,400 a year).
- Employer files and pays monthly by the 15th (IOPPD) for the prior month.
- Self-employed: 0 % to €8,400, 9 % to €12,000, 15 % above — annual.
- Municipal surtax adds 10–15 %; annual GPP-FL return due by 30 April.
Procedure
Gross salary is the contractually agreed amount of the employee's earnings before all deductions. This is the starting point for calculating all taxes and contributions.
Mandatory social contributions are deducted from the gross salary: pension insurance (PIO) 10% and unemployment 0.5%, totalling 10.5%. Health insurance contribution was abolished in January 2022.
The personal allowance (non-taxable portion) is €700 per month (€8,400 per year). It is subtracted from the amount after contributions to obtain the tax base.
Progressive rates are applied to the tax base (gross - contributions - personal allowance): 9% on the first €300 of the base and 15% on the remainder. If the base is negative or zero, the tax is €0.
A municipal surtax is applied to the calculated tax amount. The rate depends on the municipality: Budva 10%, Bar and most municipalities 13%, Podgorica and Cetinje 15%. The surtax is calculated on the tax, not on the income.
The IOPPD (Individual Consolidated Tax and Contributions Return) is filled out for each employee and submitted electronically to the Tax Administration. It contains data on gross salary, contributions, tax and surtax. This step is performed by the employer / accountant — the employee does nothing. Use our payroll wizard to compute every figure that goes into the IOPPD form.
The return is submitted electronically via the eUprava portal or the Tax Administration e-Tax system.
The annual tax return for individuals (GPP-FL) is filed by April 30 for the previous calendar year. It covers all income sources: salaries, self-employment, capital and property income.
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Income tax rates
| Monthly income | Rate |
|---|---|
| Up to €700 (personal allowance) | 0% |
| €700 — €1,000 | 9% |
| Over €1,000 | 15% |
Income tax on self-employment (entrepreneurs) — annual, from 1 Jan 2026
| Annual taxable income | Rate |
|---|---|
| Up to €8,400 | 0% |
| €8,400.01 — €12,000 | 9% |
| Above €12,000 | 15% |
| Occasional self-employment (service contracts etc.) | 15% (after 30% standard costs) |
Surtax rates by municipality
| Municipality | Surtax rate |
|---|---|
| Budva | 10% |
| Bar, other municipalities | 13% |
| Podgorica, Cetinje | 15% |
Employee contributions (from Oct. 2024)
| Type | Rate |
|---|---|
| Pension (PIO) | 10% |
| Health | 0% (abolished Jan. 2022) |
| Unemployment | 0.5% |
| Total employee | 10.5% |
Appendices to GPP-FL — when each is filed
| Appendix | Situation | Rate / regime |
|---|---|---|
| A | Self-employment income — double-entry bookkeeping | 0% up to €8,400 · 9% €8,400–12,000 · 15% above €12,000 (annual) |
| PPG | Carry-forward of prior-year business losses (attached to A) | — |
| A1 | Contribution calculation for self-employment (attached to A) | 60/100/150% of avg. salary × months worked |
| B | Domestic property income (rentals — residential, commercial, tourist) | 15% after standard deductions (30%, 50% or 70%) |
| B1 | Tenant's withholding-tax report (attached to B) | — |
| C | Domestic capital gains (sale of real estate, shares, securities) | 15% on (total gains − total losses) |
| D | Domestic sports income | 15% after 30% standard deductions (amateur 90%) |
| D1 | Payer's withholding-tax report (attached to D) | — |
| E | Copyright, patents, trademarks, self-employed expert — domestic | 15% after 30 / 50 / 60% standard deductions |
| E1 | Payer's withholding-tax report (attached to E) | — |
| F | ALL income earned OUTSIDE Montenegro (rows 1–9) | Row 1 (salary): per-month 0/9/15% at €700/€1,000. Rows 2–9: flat 15%. |
| G | Salaries from TWO OR MORE employers in Montenegro (combined gross > €700 in at least one month) | Tax Administration assesses tax itself — you only attach OPD-2 |
| H | Occasional self-employment + internet + gaming in Montenegro (no withholding) | 15% after 30% standard deductions (internet 15%, gaming 20%) |
Additional notes
Special deductions: voluntary pension contributions (up to €200/month), medical treatment and medication costs, donations to humanitarian organisations (up to 3% of taxable income).
Entrepreneurs (self-employment) pay a monthly tax advance of 1/12 of the previous year's liability by the end of the current month for the previous month (Art. 48(2) PIT Law), and file the annual calculation with the GPP-FL by April 30. Annual self-employment rates from 1 Jan 2026 (Off. Gazette 160/25): 0% up to €8,400, 9% from €8,400.01 to €12,000, 15% above €12,000.
Appendix F is filed ONLY for income earned OUTSIDE Montenegro. The same type of domestic income goes into the letter-coded appendices: property → B, capital gains → C, sports → D, copyrights → E, occasional self-employment / internet / gaming → H. The same taxpayer may file both a domestic appendix and Appendix F simultaneously for the same type of income.
Per-month calculation applies ONLY to foreign salary income (Appendix F, row 1) — the €700 and €1,000 thresholds are monthly. All other sources in F (rows 2–9) and all domestic appendices B/C/D/E/H use a flat 15% on the annual amount after standard deductions.
From 19 Nov 2025 (Sl. list CG 133/25): interest on debt securities (bonds) issued by the state, the Central Bank of Montenegro, or local government is NO LONGER taxed as capital income — it was previously taxed at 15%.
Required Documents
- IOPPD form (monthly tax and contributions return)
- GPP-FL form (annual personal tax return)
- Employment contract
- Salary payment certificates
Legal Basis
- Law on Personal Income Tax (Zakon o porezu na dohodak fizičkih lica)
- Amendments to the PIT Law, Off. Gazette 160/25 (self-employment brackets €8,400/€12,000 — from 1 Jan 2026)
- Law on Mandatory Social Insurance Contributions (Zakon o doprinosima za obavezno socijalno osiguranje)
- Law on Surtaxes (Zakon o prirezima)
Competent Institutions
- Tax Administration of Montenegro
Tax filing and collection
- eUprava
Electronic filing of returns
FAQ
What is the income tax rate?+
Progressive: after contributions and the €700 personal deduction, the first €300 of the base is taxed at 9% and the remainder at 15%. If the base is zero or negative, the tax is €0.
What is the personal deduction?+
A tax-free portion of income of €700 per month (€8,400 per year). It is subtracted after contributions to arrive at the tax base.
What is the municipal surtax and how much is it?+
A municipal add-on computed on the tax amount (not on income): Budva 10%, Bar and most municipalities 13%, Podgorica and Cetinje 15%.
When is the annual GPP-FL return due?+
By 30 April for the previous calendar year. It covers all income sources: salaries, self-employment, capital and property income.
Which deductions reduce the tax?+
Voluntary pension insurance contributions (up to €200 per month), medical treatment and medicine costs, and donations to humanitarian organisations (up to 3% of taxable income).
Related guides
Annual Personal Tax Return (GPP-FL)
Annual income tax, GPP-FL form, April 30 deadline, all income sources
Salary Calculation & IOPPD in Montenegro
Gross-to-net with pension 10%, no health ins., surtax, IOPPD filing
Social Contributions in Montenegro
Pension 10%, health abolished, unemployment 0.5% — Oct 2024 reform
Rental Income Tax
15% rate + surtax, standard costs 30/50/70%, withholding by corporate tenant or GPP-FL, non-residents, Booking/Airbnb