The Parliament of Montenegro adopted amendments to the Labor Law, which provide for an increase in the minimum wage from 222 to 250 euros. The changes will enter into force on October 1, 2021.
The deputies did not adopt the amendments that proposed setting the minimum wage at 50 percent of the average salary. During the parliamentary debate on these changes, the government was asked to reduce tax charges on employers in order not to increase undeclared employment.
Amendments to the Law on Personal Income Tax and on Mandatory Social Insurance Contributions were also adopted. For the next three years, employers will be exempt from paying taxes and contributions, 90% for wages paid this year, 60% for payments next year, and 30% for those who will be paid salaries in 2023. This law will apply from January 1.
In addition, amendments to the Value Added Tax Law were adopted, increasing the taxable turnover threshold for VAT registration from 18,000 to 30,000 euros. The changes will enter into force urgently.