Annual Personal Income Tax Return for Income Earned Abroad – Who Has to File?

More and more people living in Montenegro earn money from foreign employers, freelance work, or online jobs. At the same time, many people are still unsure whether this income is taxable in Montenegro and when they need to file an annual tax return.

Below is a simple explanation of who needs to file, which types of income must be reported, and how the tax is calculated.

WHO HAS TO FILE AN ANNUAL TAX RETURN?

According to Montenegro's Personal Income Tax Law, a tax resident of Montenegro must file an annual tax return if they earn certain types of income for which tax has not already been fully withheld.

This includes income from:

• self-employment;
• occasional freelance or independent work;
• capital gains;
• property income, in cases provided by law;
• copyrights and related rights;
• sports activities;
• online work and gaming;
• income earned abroad, including salaries paid by foreign employers.

The annual tax return must be filed by the end of April for the previous tax year.

HOW IS TAX CALCULATED ON INCOME EARNED ABROAD?

Income earned abroad is taxed under the rates set by Montenegro's Personal Income Tax Law.

For employment income (salary), the current tax rates are:

• 0% on the taxable income up to 700€ per month;
• 9% on the portion of taxable income between 700.01€ and 1,000€ per month;
• 15% on the portion of taxable income above 1,000€ per month.

WHAT IF YOU'VE ALREADY PAID TAX ABROAD?

If you're a tax resident of Montenegro and you've already paid tax on the same income in a country that has a double taxation agreement with Montenegro, you generally won't have to pay that tax again in Montenegro.

To claim this, you'll need to provide documents proving that the tax was actually paid in the other country.

HOW DO YOU FILE THE TAX RETURN?

The annual tax return is submitted online through the IRMS portal. Depending on the type of income, you'll also need to upload documents showing the income you earned and, if applicable, proof that tax was paid abroad.

If you earn income from abroad or work online, our team can help you calculate your tax, prepare all the necessary documents, and submit your annual personal income tax return.