News from Montenegro

  • Montenegro hikes VAT rate; amends excise duties
    Montenegro has recently sharpened its focus on fiscal consolidation with a target to achieve budget surplus and to establish a declining trend in the level of public debt from 2019. On the revenue side, additional measures will be aimed at further harmonization of the excise policy with the one of the EU. Additionally, the Government is set to increase the...
  • Agreement on Social Security between Montenegro and Slovakia
    Montenegro and Slovakia have enjoyed friendly relations and close cooperation in many areas of mutual importance, which is confirmed by the continuous high-level political dialogue. There is a mutual interest in fostering collaboration in various areas. The relations between the two countries have been further strengthened by the participation in various multilateral forums and organizations while intensive cooperation has also...
  • Montenegro and United States sign an Intergovernmental Agreement to implement FATCA provisions
    Montenegro has shown its commitment to improving compliance with international tax standards. The FATCA Agreement is yet another example of a set of steps taken towards broadening the cooperation between the US and Montenegro and following the international standards of cross-border tax assistance. The US Ambassador, Margaret Ann Uyehara and Montenegrin Finance Minister, Darko Radunovic, signed an Intergovernmental Agreement (IGA)...
  • To Petya or NotPetya; this is how to protect yourself!
    A new ransomware has risen and is spreading across Europe like wild fire. This new malware is creating chaos across businesses, from supermarkets to shipping ports, ad agencies and law firms. The new ransomware - code named “NotPateya” - shares some very similar characteristics to a very recent malware “Wannacry”. About NotPateya NotPateya gets its name from an older malware...
  • Tax debt payment plan introduced in Montenegro
    The Ministry of Finance of Montenegro and the Tax Administration of Montenegro have created a new program in the current tax system by way of tax incentive for companies with tax debt. The newly introduced program will facilitate payment of debt related to corporate income tax, personal income tax, social contributions, VAT and tax on real estate The relevant Law,...
  • New Double Tax Treaty signed between Montenegro and Portugal
    Montenegro has concluded double taxation treaties with more than 35 countries, and this number continues to grow. The most recently signed treaty is the one concluded with Montenegro. The agreement affects persons who are residents of one or both of the contracting states and applies to the Portuguese personal income tax, corporate tax and surtax as well as to the...
  • Electronic submission of tax returns becomes mandatory in Montenegro
    Digital certificates have been in use in Montenegro since 2010, enabling the electronic signing of documents in a fast, easy and safe manner. Per Montenegrin legislation, the digital signature has the same legal effect as a handwritten signature and is acceptable as evidence. According to the amendments to the Law on Corporate Income Tax Law, which will be applicable as...
  • Montenegro; Simplifying procedures for obtaining residency permit for non-residents
    The government of Montenegro adopted new legislative solutions, removing barriers for obtaining residency permits. The new legislation brings about short and simple procedures for obtaining a residency permit for business oriented non-residents. There are two most commonly used types of Temporary Residence Permits – the one is related to employment while the other is related to ownership of an immovable...
  • Montenegro extends network of bilateral social security agreements
    Since declaring independence, Montenegro continues to apply international treaties and agreements that had previously been concluded and acceded to by the State Union of Serbia and Montenegro. Currently, Montenegro has concluded bilateral social security agreements with 25 countries, 17 of which are EU member states. Bilateral international agreements on social insurance allow for the harmonized application of national laws of...
  • Montenegro’s tax treatment of foreign corporate executives
    Montenegro | February 2016 | Montenegro doesn’t make much of a distinction between domestic and foreign investors, as well as between domestic and foreign corporate executives of companies incorporated in Montenegro. Foreigners who are executive directors of Montenegrin companies have the same rights and duties as directors holding a Montenegrin citizenship. There is no difference in terms of taxation as...
  • Characteristics of Private Limited Liability companies in Montenegro, Bulgaria and Cyprus
    January 2016 Globalization made international capital boundaries disappear. Market size has become more important than the size of countries. Regions such as South East Europe with large number of smaller countries have attracted many foreign investors. When choosing a jurisdiction where to set up an entity for your business many elements should be considered but one of the most important...
  • New VAT exemption incentives in Montenegro
    Montenegro/November 2015 Montenegro – as a young country with a small but open economy - is steady on its course of continuously adopting various business incentives. The incentives adopted by the Government are aimed at attracting reputable foreign investors, particularly in selected industry sectors. The latest incentives relate to a new set of VAT exemption rules which affect investors and...
  • Obtaining a Montenegrin temporary residence permit based on real estate ownership
    Montenegro/November 2015 In recent years, the rate of real estate purchases by foreigners has been growing rapidly in Montenegro, with many non-residents acquiring property, particularly on the Adriatic Riviera. However, such property investments did not – until now - allow for the acquisition of a temporary residence permit. In accordance with the Law on Foreigners applicable as of Aprils 2015...
  • Economic predictions for Montenegro
    Montenegro/October 2015 Montenegro’s economy - a small and very open market – is characterized by extraordinary flexibility but also by great exposure to external shocks. Montenegro is highly dependent on tourism and Foreign Direct Investments. Additionally, it suffers from relatively high public debt, unprofitable state companies, high levels of NPLs, and ongoing bank deleveraging. It faces challenges due to an...
  • Montenegro to Award Funds to Foster Direct Investments
    Montenegro/August 2015 Recently, the Government of Montenegro - Secretariat for Development Projects has issued a public announcement for awarding funds to foster direct investments. Accordingly, subject to conditions, any domestic or foreign company, legal entity or entrepreneur can apply for funds. A direct investment is considered as an investment in tangible and intangible assets of business entities with the aim...
  • Montenegro – Austria Agreement on Avoidance of Double Taxation
    Montenegro/August 2015 The Agreement between the Government of Montenegro and the Government of the Republic of Austria for the avoidance of double taxation, published in the "Official Journal of Montenegro - International Agreements" No. 3 on 26 March 2015 and entered into force on 21 April 2015. The agreement was signed in Vienna on 16 June 2014. The Treaty applies...
  • New incentive related to the law of Cinematography in Montenegro
    Montenegro/June 2015 Since becoming independent in 2006, the Government of Montenegro has recognized the need to eliminate obstacles and reform the business environment, to open the economy to foreign investors making it closer to the European Union. One important step is related to the seventh art. The Government plans to adopt the Law on Cinematography, which provides the return of...
  • Montenegrin Government Privatization Plan 2013
    Montenegro/May 2013 During February, the government adopted decision on privatising more than 20 companies and utilising more than 30 business opportunities. The companies will be privatised through public tender, through stock exchange or public auction. The most interesting companies for international investors are: 1. Container terminal and General Cargos Bar 2. New Tobacco Company, Podgorica 3. Montenegro Airlines, Podgorica 4....
  • Privatization of Poliex- Montenegrin arms exporter
    Montenegro/March 2015 Montenegrin government announced a public tender for the sale of 50,75% of share capital of the state-owned arms company Poliex from Berane. The tender was announced in line with the program of privatization adopted by Privatization Council of Montenegro Government. Poliex is a Joint Stock Company with capital of €2.2m and 389,751 ordinary shares with a nominal value...
  • Crisis Tax
    Montenegro/March 2015 On 1st of January 2015, the Montenegrin Minister of Finance, Mr Radoje Zugic announced that the crisis tax will remain into effect in 2015, but it will be reduced from 15 % to 13%. This measure is temporary, and mentions that all earnings of €482,41 net (720 gross) are taxed at the rate of 9 % and the...
  • Double Tax Treaty between Montenegro & Azerbaijan
    Montenegro/October 2014 In March 2013 Montenegro and Azerbaijan signed a treaty for the avoidance of Double Taxation aimed at strengthening economic and trade relations between the two countries become stronger. The agreement came into force in January 2014. The agreement is applicable on taxes in both countries, including corporate income tax and personal income tax, as well as capital gains...
  • Montenegro regulates Taxation of Hydrocarbons’ Production Activities
    Montenegro/March 2014 On the February 1st session of the Montenegrin Government, the Government adopted the Draft Law on Taxation of Hydrocarbons, whereby tax policies on profit gained from extracting oil and gas, construction of facilities and related equipment as well as delivery and transport of oil and gas have been defined. The proposed Law, when ratified by the Parliament,  will...
  • Tax Treatment of Severance Payments and Vouchers
    Montenegro/June 2014 The Montenegrin Law on Personal Income Tax defines income subject to personal income tax to include salaries, income related to immovable property and immovable property rights, income related to capital as well as capital gains. All of these types of income are taxed at the rate of 9%. From a corporate perspective of interest to companies are the...
  • Montenegro – Withholding tax on dividends and its methodology
    Montenegro/May 2014 31st of March is the deadline in Montenegro for a number of statutory filings, particularly in the area of taxation and annual financial statements. This includes the annual Balance Sheets, Income Statements and Annual Tax Reports after which the distribution of dividends is possible. As a first step in the process, companies are obligated to settle their liabilities...
  • New Incentive for Investors – Hotel Developers are Free of Communal Fees
    Montenegro/March 2014 Budva Municipality, the pearl of Montenegrin tourism, is adopting new incentives for domestic as well as foreign investors for construction of new hotels and for owners of private accommodations. Year ago, Budva municipality government has adopted an incentive according to which investors that are investing in construction of the four and five stars hotels are liable to pay...
  • Ministry of Finance plans for revenue increase
    Montenegro/December 2013 Montenegrin Ministry of Finance is planning to change the way of taxation for corporate profit as well as taxation of immovable property. Several scenarios are being discussed by working groups. One of these scenarios is that all companies with revenue of up to EUR100,000.00 will be taxed with the current rate of 9%, while companies with revenue above...
  • VAT treatment of promotional activities
    Montenegro/October 2013 The open character of the Montenegrin market and the emphasis on development of the country as a tourism destination, coupled with the presence of numerous foreign companies, has made promotional activities particularly interesting for both resident and non-resident companies. Promotional activities include a wide range of advertising services that companies are taking advantage of. All activities related to...
  • VAT treatment in case of office premises purchase
    Montenegro/September 2013 Previous years in Montenegro were years of intensive real estate market development. In line with strong development of Montenegro as tourism and business destination, numerous of real estate projects were undertaken. Such strong development brought to Montenegro large number of international businesses that are today in a position to acquire office premises. Thus, VAT treatment of purchase of...
  • Alternative yachting center on Mediterranean sailing map
    Montenegro/September 2013 Increased tax liabilities related to yachts in many countries in Mediterranean region, because of the strong effects of financial turmoil, has meant many yachts owners are looking for alternative jurisdictions to register their yachts. Montenegro is situated in South East Europe and is positioned in a strategic location for the maritime world, having access to major maritime centres...
  • Tax treatment of purchase of antivirus software licenses from foreign company
    Montenegro/June 2013 Production of antivirus software systems and other services related to software products are defined as special way of providing intellectual services in area of complex science projects, especially programming, projecting and realisation. The Montenegrin VAT Law prescribes for that the purchase of antivirus system software and other products related to software products that are produced in a foreign...
  • Tax treatment of dividends
    Montenegro/May 2013 The distribution of dividends are done in accordance with the corporate law upon submission of annual financial statements, annual tax reports and payment of corporate income tax (9%) which takes place in March. Shareholders/owners of limited liability companies may be legal entities or individuals. If the recipients of the dividends are legal entities, dividends received are considered as...
  • Treatment of professional training expenses
    Montenegro/February 2013 The government issued a new regulation ("Off. Gazette of Montenegro", no. 51/12) concerning the recognition of fees as an overpaid tax, which employers pay for professional training of their employees. Specified by this regulation, the fees paid by the employer for the training of professionals, are recognised as overpaid taxes. An employer, that makes payment for the expenses...