Entrepreneurship Based on Actual Income: What You Need to Know?

An entrepreneur taxed on actual income is a natural person who performs a registered activity and pays tax based on the actual income earned (revenues – expenses). This model requires proper bookkeeping of all revenues and expenses, and tax is calculated on the net base.

KEY CHARACTERISTICS

• Single owner – entrepreneurial activity cannot have multiple owners.
• Liability – the owner is the authorized and responsible person, with unlimited liability.
• No founding capital – which makes it easier to start a business.
• Single activity – the entrepreneur can perform only the activity for which they are registered.
• No turnover or activity limits – unlike flat-rate entrepreneurs, there are no restrictions.

LIABILITY AND ASSETS

An entrepreneur taxed on actual income is liable with their entire personal property for business obligations. This means that debts can be collected from the entrepreneur’s private assets – such as bank accounts, vehicles, real estate, etc.

CONTRIBUTION CALCULATION

Contributions on the owner’s income are calculated based on:

• actual income,
• business turnover,
• the average salary in Montenegro.

The minimum contributions amount to 65.14€ per month if the business operated at a loss or if the income in the previous year was less than 8,400€.

If the income exceeds 8,400€, contributions increase proportionally with the amount of income.

INCOME TAX

The entrepreneur pays tax on actual income.

• The tax return must be submitted by April 30 of the current year for the previous year.
• By the same date, personal income tax must also be paid.

TRANSFER OF FUNDS

One of the main advantages of this model is the ability to transfer the entire income to a personal account without additional taxation, provided that all obligations are settled.

Once taxes and contributions are paid, the remaining income is considered the owner’s personal earnings and can be freely transferred to a private bank account.

Entrepreneurship under the actual income model offers greater flexibility and tax optimization opportunities but also carries significant responsibility, since the owner is liable with personal assets.

If you are considering starting or improving your business, the Perfectum team is at your disposal.
Contact us and find out how we can simplify administration and contribute to the success of your business!