06. 10. 2025.
Dividend represents one of the most common ways in which company owners use the generated profit. However, the payment of dividends is subject to clear tax rules that are important to understand in order to avoid unpleasant surprises and properly plan business operations.
WHAT IS A DIVIDEND?
A company’s profit at the end of the business year represents the difference between income and expenses, as determined in the financial statement.
Corporate income tax is first paid on the profit, at rates of 9%, 12%, or 15%, depending on the amount of profit.
Only after this tax is paid does the net profit remain, which belongs to the company, not directly to the owner. If the owner wishes to use that profit for personal purposes, dividend tax and surtax must be paid.
WHO HAS THE RIGHT TO A DIVIDEND?
The right to dividend payment belongs to the members of the company, based on the company’s decision on profit distribution.
DIVIDEND PAYMENT TO INDIVIDUALS
When a company pays dividends to individuals (residents and non-residents of Montenegro), a 15% tax is applied to the gross dividend amount.
DIVIDEND PAYMENT TO FOREIGN LEGAL ENTITIES
If a dividend is paid to a foreign legal entity, a 15% tax is also applied to the gross amount.
This rate may be lower if the recipient’s country has a signed international treaty with Montenegro on the avoidance of double taxation.
DIVIDEND TAX AND SURTAX
For an owner to withdraw profit from the company’s account and transfer it to their personal account, they must pay:
SURTAX RATES IN SPECIFIC MUNICIPALITIES:
The total tax burden (tax + surtax) ranges between 18% and 20%, depending on the municipality where the company is registered.
For example, if you wish to withdraw 1,000€ of net profit, you will pay between 180€ and 200€ in tax and surtax, depending on the municipality.
