Montenegro: Montenegro-Azerbaijan DTT analysis
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Montenegro: Montenegro-Azerbaijan DTT analysis

zivkovic.jpg

Jelena Zivkovic

In March 2013 Montenegro and Azerbaijan signed a treaty for the avoidance of double taxation (a double tax treaty (DTT)) aimed at strengthening economic and trade relations between the two countries. 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 tax regardless of the type and method of collection.

In line with the agreement, a resident is considered to be a physical person or a legal entity which is a taxpayer in the country due to the residency, temporary residency or seat of the company management.

In situations when a physical person is resident of both countries, the person will be liable for taxation in the country of permanent residency.

Permanent establishment (PE), in line with the DTT, is a permanent place from which a company fully or partially undertakes its business activities, including a company seat, branch, representative office, factory, workshop, mine, ship or any other place from which exploration of natural resources is undertaken. Additionally, a PE will be considered to exist at a construction site where works are being performed for a period exceeding 12 months.

Any income generated from immovable property located in either of the contracting states may be subject to tax in the state where the immovable property is located.

Corporate profits are taxed in the contracting state in which they are realised except if a company has business activities in the other state via a permanent establishment. If the company is undertaking activities in the other state through a permanent unit, the corporate profits will be taxed in that other country up to the amount of the profit generated in that state.

The treaty provides 10% withholding tax rates (WHT) for dividends (Article 10), interest (Article 11) and royalties (Article 12).

Exchange of information defined in Article 26 will allow the Competent Authorities of both states to exchange information deemed relevant for the administration or enforcement of domestic laws in relation to taxes, as long as such laws are not in breach of the DTT.

Jelena Zivkovic (jelena.zivkovic@eurofast.eu)

Eurofast Global, Podgorica Office

Tel: +382 20 228 490

Website: www.eurofast.eu

more across site & bottom lb ros

More from across our site

PwC could elect a woman into the senior leadership position for the first time; in other news, KPMG Australia has extended its CEO’s term
The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
HSBC has settled a claim originally worth £240m relating to a failed film tax relief scheme without admitting liability or wrongdoing
Their prediction comes after the IRS announced it would send compliance letters to large foreign companies emphasising their US tax obligations
Gift this article