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Montenegro: Reform of Tax System Announced

(Feb. 11, 2015) Montenegro, a small nation in southeastern Europe that become independent from Serbia on June 3, 2006, published an economic reform program for the years 2015-2017 on February 3, 2015. (Ivana Kireta, Montenegro: Tax Reform Announced (Feb. 5, 2015), TAX NEWS SERVICE, IBFD online subscription database; Central Intelligence Agency, Montenegro, in WORLD FACTBOOK (last visited Jan. 6, 2015).) The program will next be reviewed by the unicameral legislature. It contains a strategy for fiscal policy and includes a number of proposed changes in the country’s tax structure. (Kireta, supra.)

  • Excise duties will increase on alcohol, carbonated drinks, tobacco and tobacco products.
  • A new tax will be imposed on coffee and gambling gains.
  • Fuel prices will go up by €.05 (about US$.057) per liter.
  • The income tax on the highest earners will be reduced from 15% to 13%.
  • The contribution due for health insurance will increase by 0.5%.
  • Not paying taxes and social security contributions when an employer pays wages will be subject to criminal liability. (Id.)

Furthermore, investors in the energy sector; in high-end tourism, such as hotels with at least five stars; or in food production will be given tax incentives. The incentives consist of tax holidays relative to these investments, affecting value-added tax, customs duties, municipal utility fees, and other fees. (Id.)