Montenegro to cut taxes on salaries

Starting January 1st, 2007, the unique proportional tax rate, determined by the Law, is applied in Montenegro.

Taxes on salaries in 2007 and 2008 amounted to 15%, and they were lowered to 12% at the beginning of this year. Starting from the beginning of year 2010, they will amount to 9%, the same as the current tax on profit of juristic persons.

People in the Ministry of Finance of Montenegro told Ekonomist that the tax rate for mandatory social insurance had also been reduced, and that they would be gradually lowered prior to 2010 when the overall taxes on salaries would amount to about 30%, and they would be the lowest in the region. In addition, all employees and citizens of Montenegro have the right to use standard personal deducation that amounts to 840 EUR per tax payer in 2009, that is, 70 EUR per month.

Average salary in Montenegro with all fiscal obligations amounted to 461 EUR (gross 642) in March 2009, while overal taxes amounted to 285.5 EUR.