Official Gazette 121/22, published in Montenegro on early November 2022, introduced taxpayers’ obligation to prepare and submit a Transfer Pricing (TP) Study. Transfer price is the price incurred in connection with asset transactions or the creation of obligations between related parties. TP documentation must be prepared by entities that perform transactions with related parties (intercompany transactions) during the fiscal year. TP documentation must be prepared annually in case there are intercompany transactions in the relevant business year.

The necessity of submission of the TP Study within the deadlines or delivering it upon request through a tax audit is based on the classification of companies according to accounting law.

Based on this, classification is on:

  1. Large taxpayers, carrying out intragroup transactions, are required to submit TP Study, whether the terms of these transactions are in accordance with the “arm’s length” principle. Bearing in mind that the deadline for submitting profit tax returns is March 31 for the previous year, the deadline for submitting TP documentation is the same. However, an extension is provided until 2027, and the deadline for submitting the file is defined as the 30th of June of the following year.

A corporation is considered large taxpayer if it fulfills 2 out of 3 criteria in the prior year:

  • average number of employees in the business year up to 250;
  • total annual income up to €40.000.000
  • total assets up to €20.000.000
  • Other taxpayers are obliged to prepare a TP documentation when submitting the income tax return and to submit it upon request of the competent tax authority. In practice authorities should receive it within 45 days from the request date.

For transactions with related parties that do not exceed 75.000 Euros a simplified report can be prepared.

Also, the new Law on Corporate Profit Tax regulates other items related to transfer prices:

  • the term “related parties” is defined in more detail and the 25% in shares/votes is set as a general threshold;
  • all five OECD methods for checking transfer prices are introduced, with the possibility of applying other methods that are not explicitly mentioned and a combination of all methods;
  • The publication of “arm’s length” interest rates for loans and other financial instruments is foreseen.

For additional information, please contact Fahrudin Sutkovic, Head of Accounting in our Eurofast office in Montenegro, Podgorica at, or Ms. Maria Anastasiou, TP Advisor in Greece, Athens at 

Fahrudin Sutkovic Eurofast

Fahrudin Sutkovic
Head of Accounting
Eurofast Podgorica

Maria Anastasiou Eurofast

Maria Anastasiou
Transfer Pricing Advisor
Eurofast Athens