In the first quarter of 2026, Montenegro recorded corporate tax revenues of €163 million, a decrease from €167 million in the same period of 2025. This €4 million year-on-year decline indicates a potential stabilization after a period of stronger earnings following the pandemic, rather than a significant downturn.
Corporate income tax plays a vital role in Montenegro’s public finances, contributing approximately 34% of total tax revenues during the first three months of 2026. This reliance underscores the importance of business profitability across key sectors such as tourism, energy, trade, and construction.
The release of these figures coincides with extended deadlines for corporate tax return submissions and financial statements, aimed at easing the transition to the new Integrated Revenue Management System (IRMS). As a result, current revenue figures may be subject to revision as more companies finalize their reports, particularly those indicating losses or lower taxable income.
The Tax Administration has also been active in compliance checks, conducting 56 full tax audits in the first two months of 2026 that examined compliance over a five-year span. These audits identified an additional €366,000 in corporate tax liabilities across 17 taxpayers, highlighting ongoing challenges related to reporting accuracy and tax base erosion.
Common methods of tax avoidance noted by authorities include inflating expenses or underreporting revenues, which diminish the taxable profit base. This is particularly relevant in Montenegro’s competitive corporate tax environment, where effective rates range from 9% to 15% based on profit levels. Thus, ensuring compliance and reporting integrity has become crucial beyond merely considering nominal tax rates.
The slight drop in corporate tax revenues corresponds with broader economic trends in Montenegro. While overall growth persists, it is increasingly driven by service sectors like tourism, while industrial and export-oriented sectors exhibit more moderate growth. This shift introduces volatility in profit generation outside peak seasonal periods.
The year 2026 also marks the implementation of the OECD-aligned global minimum tax framework, establishing a 15% effective minimum rate for large corporations. Although immediate fiscal impacts may be limited, this reform is anticipated to gradually alter the tax landscape by curbing profit-shifting practices and aligning Montenegro with EU and global taxation standards.
The reported €163 million for Q1 suggests a plateau in corporate profitability rather than growth acceleration. Fiscal authorities will likely need to focus on enhancing compliance and structural reforms as opposed to relying solely on organic revenue increases.
This situation signals to investors and policymakers that Montenegro’s fiscal stability remains intricately linked to corporate earnings. However, there is an emerging emphasis on the quality of revenue—encompassing compliance, transparency, and sustainability—alongside traditional measures of nominal growth.
