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Montenegro: Crisis tax


Jelena Zivkovic

On January 1, the Montenegrin Minister of Finance, Radoje Zugic announced that the crisis tax will remain in effect in 2015, but the rate at which it is levied will be reduced from 15% to 13%. This measure is temporary, and mentions that all earnings of €482.41 net (€720 gross) are taxed at the rate of 9% and the earnings exceeding this amount will be taxed at a rate of 13 %. This amount can be paid by the employer or employees, depending on the company's policy.

Model tax reform provides that investors invest in priority sectors and pay less for duties associated (VAT, customs, utilities, fees and taxes) for the realisation of investments. The ministry is actively dealing with fiscal policy, which is a process of consolidation of the revenue and expenditure side of the budget and through appropriate incentives should contribute to the health of public finances and economic growth.

It's stated that Montenegro came out of deflation, because the latest available data for November 2014, annual inflation rate was zero. From the perspective of banking, the number of employees has been increased by three thousand in the last year, and there has been a strong growth in deposits, as well as a decline in the level of non-performing loans.

Looking back to early 2013 (on February 8) when the crisis tax was introduced on salaries, that year's budget was supplemented by €13 million. Therefore, by increasing the 9% rate to 15% on gross salaries of more than €720, employers effectively transfer the burden to the employees.

In that year, on the basis of the crisis tax and increase in the VAT rate from 17% to 19% per euro, tax revenue taken from citizens was more than €75 million.

The Ministry has also published the increase and changes in social security contributions and more specifically the rates for which the contributions shall be paid to the health insurance of the employees. The Act was adopted by the parliament, with government support.

Jelena Zivkovic (

Eurofast Global, Podgorica Office

Tel: +382 20 228 490


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