Montenegro: Montenegro-Azerbaijan DTT analysis

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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 & shared bottom lb ros

More from across our site

It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
The sprawling legislation phases out Joe Biden-era green tax incentives for businesses; in other news, the UK will reportedly maintain its DST despite US pressure
New French legislation should create a more consistent legal environment for taxing gains from management packages, say Bruno Knadjian and Sylvain Piémont of Herbert Smith Freehills Kramer
The South Africa vs SC ruling may embolden the tax authority to take a more aggressive approach to TP assessments, an adviser tells ITR
Indirect tax professionals now rate compliance as a bigger obstacle than technology and automation; in other news, Italy approved a VAT cut on art sales
AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
Gift this article