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NewsMontenegro, Digital nomads exempt from income tax and contribution payments

Montenegro, Digital nomads exempt from income tax and contribution payments

At yesterday’s session, the government determined changes to the Law on Personal Income Tax, which prescribes a new source of income (other income), tax exemptions for digital nomads and beneficiaries of incentive measures for the development of research and innovation, changes in tax exemptions for income of natural persons, and a protective measure in case of abuse in the transfer of shares in a legal entity.
According to the current law, incomes of natural persons who are not employed by the payer are included in personal incomes on which tax is paid at progressive rates with a non-taxable part of the salary.
– It is proposed that this and other similar incomes be prescribed as a separate source of income, on which tax will be paid at a proportional rate of 15%, bearing in mind that these incomes are not wages. Fairer solutions have also been proposed in exemptions from paying personal income tax, so that the exemption will be retained for categories of income on which no tax has been paid until now, and the part of that income that exceeds the limits established by the Law will be taxed according to the rules prescribed for other income – they stated from the Government.
It is also planned to increase the limit of severance pay upon retirement, on which no income tax is paid, from EUR 1,000 to EUR 1,500, as well as for all types of jubilee awards, by EUR 50 each. Income for a newborn child, regardless of its amount, is included among the incomes on which personal income tax is not paid.
– The valid legal solution stipulates that the capital gain from a share in a legal entity represents the difference between the sale and purchase value of the share, but the protective norm is not specified in the case when the sale value is unrealistically stated. Therefore, it was proposed that if the sales value is lower than the market value, in that case the sales value is determined by the competent tax authority in accordance with the law governing the tax procedure – it was clarified.
Since court proceedings and proceedings before state authorities can last a long period of time, and with the aim of fair taxation of personal income arising from those proceedings, the obligation of the payer of the income, who until the date of entry into force of this law, has not calculated, suspended and paid the tax on earnings that is paid after the end of the procedure, to do so during the payment of that income, at the rate that was valid on the day when it was supposed to be paid.
Also, the Proposal for the Law on Amendments to the Law on Contributions for Mandatory Social Insurance was established. As stated by the Government, it is about alignment with amendments to the Law on Personal Income Tax.
– The innovative provisions regulate: changing the definition of the base for calculation and payment of contributions, strengthening the legal force for reliefs that can be achieved by agricultural producers, improvement of the legal solution that prescribes the return of overpaid contributions, detailed prescribing of incomes for which contributions are not paid, prescribing exemptions from payment contribution for the beneficiary of incentive measures for the development of research and innovation, and the digital nomad – the Government concluded.
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