Montenegro corporate cross-border tax, tax year 2026

Who this applies to

Companies (legal persons) that pay to, or receive from, abroad, and nonresident companies with Montenegro income. Payments to or by individuals are covered in the income tax skill and the payroll skill.

• Resident company: incorporated in Montenegro, or with its seat of actual management and control in Montenegro (CIT Law art. 3(1)). Taxed on profit made in and outside Montenegro (art. 4(1)).
• Nonresident company: not incorporated and not managed in Montenegro (art. 3(2)). Taxed on profit made in Montenegro (art. 4(2)); a nonresident's PE is taxed on the profit of that PE (art. 4(3)).
• Nonresident with no PE: taxed only on the income listed in Article 29(1) to (3), by withholding (art. 4(6)), and on capital gains and rents under Article 29c.

A permanent establishment is a fixed place of business through which the company carries on all or part of its business: a place of management, branch, office, factory, workshop, mine, oil or gas well, quarry or other place of extraction. A building site or assembly project is a PE only if it lasts more than six months (art. 4(4)). Not a PE (art. 4(5)): facilities used only to store, display or deliver the company's goods; stocks held for those purposes or for processing by another company; a fixed place used only to buy goods or collect information; a fixed place for preparatory or auxiliary activity, or a combination of these where the whole activity stays preparatory or auxiliary.

The 2026 law is the CIT Law consolidated through Official Gazette 88/24. The amending law 104/26 applies from 1 January 2027, and some of its chapters only from EU accession (see Cross-border points).

Rates, bands and thresholds

Item	Amount	Tax year	Source
Withholding on dividends and profit shares paid to resident and nonresident companies	15% of gross	2026	CIT Law art. 29(1)(1), (4)
Withholding on interest, royalties (copyright and other IP, including software and use of equipment), capital gains, rent of movable and immovable property, consulting, market research and audit fees paid to a nonresident company	15% of gross	2026	CIT Law art. 29(1)(2), (4), 29b
Withholding on liquidation distributions to companies	15% of gross	2026	CIT Law art. 29(1)(3), (4)
Withholding on fees to a nonresident company for entertainment, artistic, sports or similar performances in Montenegro	15% of gross	2026	CIT Law art. 29(3), (4)
Withholding on purchases of used goods, semi-finished and agricultural products from individuals (resident or nonresident)	15% of gross	2026	CIT Law art. 29(2), (4)
Withholding on income of a nonresident company from a listed low-tax territory	30% of gross	2026	CIT Law art. 29(5) to (7), (10); Ministry list, 46 territories
Nonresident company's capital gains (from another nonresident or from an individual) and rents from a payer with no withholding duty	15%, unless a treaty provides otherwise; own return within 30 days	2026	CIT Law art. 29c
Annual withholding report	by the end of February for the previous year	2026	CIT Law art. 29(11)
CIT rates (residents and PEs)	9% to EUR 100,000; EUR 9,000 + 12% to EUR 1,500,000; EUR 177,000 + 15% above	2026	CIT Law art. 28
Credit for foreign tax on business profit	foreign tax paid, capped at Montenegro tax on that profit	2026	CIT Law art. 33
Credit for tax on dividends from a foreign subsidiary	holding of 10% or more for an unbroken year before the return; unused credit carried forward up to 5 years	2026	CIT Law arts. 34a, 34b
PE threshold for building or assembly sites	more than 6 months	2026	CIT Law art. 4(4)
CIT return and payment	3 months after year end, electronic	2026	CIT Law art. 40(3), (6)
Fine, legal person (withholding not computed, withheld or paid; report not filed; return failures)	EUR 1,000 to 20,000	2026	CIT Law art. 42a(1)
Fine, responsible person in the company	EUR 500 to 2,000	2026	CIT Law art. 42a(2)
Interest on unpaid or underpaid tax, 1 January to 17 July 2026	0.03% a day from the day after the due date	2026	Tax Administration Law art. 95
Interest on unpaid or underpaid tax, 18 July to 31 December 2026	5.4% a year (ECB main refinancing rate + 3 points, set each half-year)	2026	104/26 Tax Administration Law amendment arts. 20, 26; Tax Administration decision, 24 Jul 2026

The 15% withholding rate is the 2026 rate for every Article 29 payment; 9% is the first CIT band, not a withholding rate.

The taxable base

Withholding: what is caught

Withholding is charged on the gross amount at the moment of payment (art. 29(4)). Only the income types in Article 29 are caught. Article 29b defines them:

• Interest: income from debt claims of every kind, secured or not, including income from securities and bonds and their premiums and prizes; default interest is excluded (art. 29b(1)).
• Royalties: payments for the use of, or right to use, copyright in literary, artistic or scientific work (including films and software), patents, trademarks, designs or models, plans, secret formulas or processes, know-how, and industrial, commercial or scientific equipment (art. 29b(2)).
• Dividends: income from shares or other profit-sharing rights that are not debt claims (art. 29b(3)).
• Consulting: advice and intellectual services on business, financial and technical projects, and legal, tax, accounting and audit services and other business advice. Excluded: seminars, lectures, workshops and other teaching; engineering, architectural and similar services that produce written documents (designs, drawings, instructions); intermediation and agency; use of databases (art. 29b(4)).
• Market research and audit of financial statements: as defined in art. 29b(5) and (6).

A fee to a nonresident company for a service outside these definitions (for example engineering drawings, agency commission or database access) bears no Montenegro withholding under the CIT Law. Classify each payment from the contract and the deliverable, not the invoice label.

If the contract fixes a net amount and the payer bears the tax, gross up: gross = net / (1 - rate). If the contract states a gross fee, withhold from it.

A Montenegro PE of a nonresident company also withholds on the payments in Article 29(1) to (3) (art. 29(8)). No withholding is due where the payment is income attributed to a Montenegro PE of the nonresident recipient (art. 29(9)); that income is taxed in the PE's return instead.

Low-tax territories

A nonresident company from a territory on the Ministry's list pays 30% instead of 15% (art. 29(5)). A company is "from" the territory if it is incorporated there or has its registered seat, seat of management or place of actual management there (art. 29(6)). The 30% rate does not apply to a company that is also resident of a state with which Montenegro has a double tax treaty (art. 29(7)). The list (published 28 March 2025) names 46 territories, including Anguilla, the Bahamas, Bahrain, Barbados, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Guernsey, the Isle of Man, Jersey, Liberia, Macao, Mauritius, Panama, the Seychelles, Vanuatu and the US Virgin Islands. A company from a listed territory is also a related person for transfer pricing (art. 38(6)).

Nonresident capital gains and rents (Article 29c)

A nonresident company that makes a capital gain from a sale to another nonresident company or to an individual, or receives rent from a payer that has no withholding duty, pays 15% unless a treaty provides otherwise (art. 29c(1) and (2)). Through a tax representative it files a return within 30 days of earning the income, with the tax office of the municipality where the property is, where the company whose shares or securities were sold has its seat, or where the rent payer has its seat or residence; the tax office issues an assessment (art. 29c(3)). The gain is the sale price (market value received, less selling costs) minus the adjusted acquisition cost under Articles 22 to 24.

Residents: foreign income and credits

A resident company includes foreign profit in its base. Dividends from a company that pays Montenegrin CIT are excluded from the recipient's base (art. 9); dividends from a foreign company are not.

Foreign business profit (art. 33): the credit is the foreign profit tax paid, capped at the amount the CIT Law would charge on that foreign profit.

Dividends from a foreign subsidiary (arts. 34a and 34b): the parent includes the dividend grossed up by the withholding tax paid on it, and reduces its CIT by the tax the subsidiary paid abroad on the dividends, capped at the Montenegro tax on that profit or dividend. Unused credit carries forward for up to five years. The parent must have held 10% or more of the subsidiary without a break for at least one year before filing the return, and must give the tax authority evidence of the holding, its duration, the tax the subsidiary paid and the subsidiary's income statement. The same applies to an indirect holding of 10% or more through another nonresident subsidiary (art. 34b(3)).

PE profit and head-office charges

A PE's profit is computed like a resident's. Administrative costs a PE pays to its nonresident head office are not deductible (art. 11(5)). Interest paid to nonresidents above the usual commercial rate is not deductible (art. 11(4)). Dealings between a PE and its head office need transfer-pricing documentation (art. 38c(4)); see the transfer pricing skill.

Deadlines and filing

Obligation	Deadline	Source
Compute, withhold and pay withholding tax	when the payment is made	CIT Law art. 29(4)
Annual report of withholding tax paid	by the end of February for the previous year (2026 payments: 28 February 2027)	CIT Law art. 29(11)
Nonresident's return for capital gains and rents (Article 29c)	within 30 days of earning the income, through a tax representative; the tax office issues an assessment	CIT Law art. 29c(3)
CIT return (Form PD) with income statement and balance sheet, and payment	within three months after the end of the tax period, electronically (calendar 2026: 31 March 2027)	CIT Law art. 40(3), (4), (6)
Evidence for the foreign-dividend credit	with the return	CIT Law art. 34b(2)

On request, the tax authority issues a nonresident a certificate of tax paid in Montenegro (art. 29a(4)) and issues residents a certificate of residence (art. 34(2)).

Penalties and interest

CIT Law Article 42a fines a legal person EUR 1,000 to 20,000, and the responsible person in it EUR 500 to 2,000, where it:

• does not compute, computes wrongly or does not pay withholding tax on Article 29 income (art. 42a(1)(1));
• does not file the withholding report on time (art. 42a(1)(2); the provision cross-refers to "Article 29a(11)", which does not exist; the reporting duty is in Article 29(11));
• does not compute CIT under the law, or does not file the return electronically within three months (art. 42a(1)(5) and (6)).

A payer that applies a treaty without the residence certificate or beneficial ownership the law requires pays the difference between the tax withheld and the tax due (art. 29a(3)). Unpaid or underpaid tax carries interest at 0.03% a day until 17 July 2026 and, from 18 July 2026, at 5.4% a year (ECB main refinancing rate plus 3 points, set each half-year; 104/26 arts. 20 and 26 and the Tax Administration decision of 24 July 2026), from the day after the due date, with no interest on interest (Tax Administration Law art. 95). Overpaid tax earns interest at the same rate (art. 96(1)). Until 17 July 2026 that interest ran from the day the refund claim was received; from 18 July 2026 art. 96(2) says interest is calculated within 30 days of receipt of the claim (104/26 art. 21). Appeals and enforcement follow the tax procedure law (CIT Law art. 42).

Cross-border points

Treaty relief at source

A tax treaty takes priority over the CIT Law (art. 34(1)). The payer applies the treaty rate only if the nonresident proves (art. 29a(1) and (2)):

• residence in the treaty state, by a certificate or other document certified by that state's competent authority; and
• that it is the beneficial owner of the income.

Without both, withhold at 15% (or 30%); the payer is liable for any shortfall (art. 29a(3)). The Ministry publishes the list of treaties in force; read the treaty and any protocol for the income type and date of entry into force.

Changes that do not apply in 2026

• EU directives: the withholding exemptions for interest and royalties between associated EU companies (arts. 29d to 29g) and for dividends to EU parents (art. 29h), and the EU merger rules (chapter VIa), apply only from the day Montenegro joins the EU (art. 45a).
• From 1 January 2027 (104/26 arts. 8, 9, 19): a nonresident performer's income from a payer with no withholding duty moves into the Article 29c return; the Article 28a rule on loans to individuals is reworded (tax on the amount above EUR 5,000 a year, no allowance for related persons).
• From EU accession (104/26 arts. 15 to 17): interest limitation (30% of EBITDA or EUR 3,000,000), CFC rules, exit tax, hybrid and residence mismatch rules, advance pricing agreements and a general anti-abuse rule.

Global minimum tax for large groups

The Global Minimum Tax Law (Official Gazette 33/26) is in force from 10 March 2026 (art. 37). It covers members of a multinational or large domestic group whose consolidated revenue was at least EUR 750 million in at least two of the four fiscal years before the reporting year (art. 2(1)). A group member in Montenegro whose effective tax rate is below 15% pays a domestic top-up tax (art. 5) and files the return and pays within 18 months after the end of the fiscal year (art. 30(1)). This skill does not compute the top-up tax.

Worked examples

All amounts in EUR. Each example assumes the recipient's status and the income type are already established, with no VAT or currency issues.

1. Consulting fee to a nonresident company, gross contract

A resident company pays a nonresident company a consulting fee of 20,000 gross. The recipient is not from a listed territory and claims no treaty relief. Withholding is 15% of 20,000 = 3,000, paid on the day of payment; the supplier receives 17,000 (arts. 29(1)(2), 29(4), 29b(4)).

name: Montenegro ordinary gross corporate withholding
inputs:
  gross_fee: 20000
  applicable_rate: 0.15
steps:
  - withholding: gross_fee * applicable_rate
  - supplier_cash: gross_fee - withholding
expected:
  withholding: 3000
  supplier_cash: 17000

2. Net-of-tax contract and gross-up

The same service, but the contract guarantees the supplier 17,000 net and the payer bears the tax. The gross fee is 17,000 / (1 - 0.15) = 20,000; withholding 3,000 (art. 29(4)).

name: Montenegro corporate fee net guarantee gross up
inputs:
  guaranteed_net: 17000
  applicable_rate: 0.15
steps:
  - gross_taxable_fee: guaranteed_net / (1 - applicable_rate)
  - withholding: gross_taxable_fee * applicable_rate
  - supplier_cash: gross_taxable_fee - withholding
expected:
  gross_taxable_fee: 20000
  withholding: 3000
  supplier_cash: 17000

3. Consulting fee to a company from a listed territory

A company incorporated and managed in Jersey, and not resident in any treaty state, receives a consulting fee of 10,000 gross. Jersey is on the Ministry list, so withholding is 30%: 3,000, and the recipient gets 7,000 (art. 29(5) to (7)). The Jersey company is also a related person for transfer pricing (art. 38(6)).

name: Montenegro conditional specified territory withholding
inputs:
  gross_fee: 10000
  established_special_rate: 0.30
steps:
  - withholding: gross_fee * established_special_rate
  - recipient_cash: gross_fee - withholding
expected:
  withholding: 3000
  recipient_cash: 7000

4. Credit for foreign tax on business profit

A resident company has taxable profit of 90,000: 50,000 domestic and 40,000 from abroad, on which it paid 6,000 foreign profit tax. All profit is within the 9% band. Montenegro tax before credit is 8,100. The credit cap is 40,000 x 9% = 3,600, so the credit is 3,600 and tax payable is 4,500. The 2,400 of foreign tax above the cap is not credited this year and is not refunded (arts. 28, 33).

name: Montenegro first band foreign business tax credit cap
inputs:
  domestic_profit: 50000
  foreign_profit: 40000
  first_band_rate: 0.09
  qualifying_foreign_tax_paid: 6000
steps:
  - total_profit: domestic_profit + foreign_profit
  - montenegro_tax_before_credit: total_profit * first_band_rate
  - foreign_profit_cap: foreign_profit * first_band_rate
  - credit_used: min(qualifying_foreign_tax_paid, foreign_profit_cap)
  - montenegro_tax_after_credit: montenegro_tax_before_credit - credit_used
  - foreign_tax_above_cap: qualifying_foreign_tax_paid - credit_used
expected:
  total_profit: 90000
  montenegro_tax_before_credit: 8100
  foreign_profit_cap: 3600
  credit_used: 3600
  montenegro_tax_after_credit: 4500
  foreign_tax_above_cap: 2400

Ask the client first

1. Where is each company incorporated, and where are its board decisions actually taken?
2. For each payment abroad: what exactly was bought (read the contract and deliverable), the gross amount, and is the contract gross or net of tax?
3. Is the recipient incorporated, seated or managed in a territory on the Ministry list, and is it also resident in a treaty state?
4. Does the recipient claim treaty relief, and has it supplied a residence certificate certified by its own tax authority and confirmed it is the beneficial owner?
5. Does the nonresident have a branch, office, or a building or assembly site in Montenegro lasting more than six months?
6. For foreign income: how much foreign tax was actually paid, on what profit, and for a foreign dividend, what holding has the company had and for how long?

Sources

Source	URL	Read on
Corporate Profit Tax Law (Zakon o porezu na dobit pravnih lica), Ministry of Finance consolidated text through Official Gazette 88/24, arts. 3, 4, 9, 11, 21 to 24, 28, 29 to 29h, 33 to 34b, 38(6), 38c(4), 40, 42, 42a, 45a	https://wapi.gov.me/download/8826962a-3806-4619-afa4-0029b0a57afb?version=1.0	2026-10-30
Law amending the Corporate Profit Tax Law, Official Gazette 104/26, arts. 1, 8, 9, 15, 16, 17, 19	https://wapi.gov.me/download/8951908b-625c-4219-aefe-0c86501ddaf8?version=1.0	2026-10-30
Ministry of Finance, list of territories with tax sovereignty under CIT Law art. 29 (published 28 March 2025)	https://wapi.gov.me/download/10ea79a6-8f36-463d-ab8c-b88ab655b61c?version=1.0	2026-10-30
Ministry of Finance, list of double tax treaties	https://www.gov.me/clanak/ugovori-o-izbjegavanju-dvostrukog-oporezivanja	2026-10-30
Tax Administration Law (Zakon o poreskoj administraciji), consolidated text through Official Gazette 160/25 (before 104/26), arts. 95 and 96	https://wapi.gov.me/download/6bf4fd6a-fa32-4c33-9f5a-3a13ae509233?version=1.0	2026-10-30
Tax Administration Law, Ministry consolidated text through Official Gazette 104/26, arts. 95 and 96	https://wapi.gov.me/download/8e3ee8d0-f10c-453a-90ad-6439ac07aca2?version=1.0	2026-10-30
Law amending the Tax Administration Law, Official Gazette 104/26 (17 July 2026), arts. 20 (new art. 95 rate: ECB + 3 points), 21 (new art. 96) and 26 (in force the next day)	https://wapi.gov.me/download/c22f3c59-7e52-4213-bbe4-3cd9d8d3a373?version=1.0	2026-10-30
Tax Administration decision on the default interest rate for 18 July to 31 December 2026 (5.4% a year), 24 July 2026	https://wapi.gov.me/download/6d6ec964-3dd6-4588-b81a-a5affc153f6e?version=1.0	2026-10-30
Global Minimum Tax Law (Zakon o globalnom minimalnom porezu na dobit pravnih lica), Official Gazette 33/26 (published and in force 10 March 2026): arts. 2, 5, 30, 32, 37	https://www.sluzbenilist.me/propisi/391203/download	2026-10-30

Not yet confirmed: treaty withholding rates for each treaty partner (no treaty text was read); the form and content of the annual withholding report and the Article 29c return; how to allocate the Article 33 cap where total profit crosses the 9% band (the law gives no allocation rule); whether foreign tax above the Article 33 cap can be carried forward (Article 33 is silent; only Article 34a has a five-year carry-forward); the refund procedure where too much tax was withheld; whether refund interest runs from the day of the claim or from day 30 under the new Tax Administration Law art. 96(2); the first fiscal year for which the Global Minimum Tax Law top-up tax is due (the law states no start date other than entry into force on 10 March 2026, and its art. 32 transition table begins with fiscal years starting in 2026).

Contributed by Michael Cutajar.