Bookkeeping in Montenegro: VAT (PDV), corporate tax and the Europe Now reform

The standard PDV rate is 21%, with a reduced 7% rate for specific goods and services such as basic foodstuffs, books and accommodation. Registration becomes mandatory once turnover passes the national threshold over a 12-month period.

Returns are filed monthly, typically due by the 15th of the following month. As elsewhere, the reduced-rate and exempt categories are where coding errors creep in.

Montenegro moved from a single low rate to a progressive corporate income tax, with bands rising from 9% on lower profits to higher rates on larger ones. It remains competitive by European standards while raising more from the largest companies.

Profit is determined on an accruals basis, so clean double-entry records and correct depreciation feed directly into the tax figure.

The Europe Now programme (Evropa sad) reshaped payroll: it raised the non-taxable portion of wages, reduced or abolished certain contributions, and lifted net salaries. Personal income tax on wages became progressive above a threshold.

Because the programme has been revised since its launch, payroll parameters here change more often than the VAT or corporate rules — build in a habit of re-checking them each year.

Treat any specific rate or threshold as a starting point and confirm the current figure with the Montenegrin tax authority before filing — the reform timeline means published numbers age quickly.

The fundamentals, though, are stable: monthly PDV, accrual-based corporate tax, and payroll that rewards getting the non-taxable threshold right.