All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Montenegro to maintain competitive tax system

To prevent consequences similar to those in the European countries regarding current debt crisis, the Montenegrin government plans to implement a number of economic measures by the end of the year, which will mostly concern public sector spending.

The government announced that the measures would not include any tax increases. However, there are possibilities to consider decreases in the salaries of a public sector.

According to the officials, debt crisis in the Eurozone countries cannot bypass Montenegro as the foreign direct investment flow comes from or through these countries.

The good news is that the government will continue with the improvement of the competitive tax system, which is the main advantage of Montenegro. Recent statistic claims that just for the first half of 2011, economic growth of Montenegro was increased by 2.1% which is very close to the prediction of the 2.5% for the whole year. As the main generators of the economic growth remains with the sectors such as tourism, trade, energy, engineering and processing industry, the government's efforts to facilitate the new investments and business climate for the foreign companies and entrepreneurs is ongoing.

From a tax perspective, the Montenegrin transparent tax system can offer numerous benefits such as for investments in the north part of the country the 9% profit tax obligation is eliminated for the first three year of the operation. It is worth mentioning that, even though some countries in the region have increased VAT rate as a part of the austerity measures, Montenegro's VAT rate of 17% remained unchanged.

Most recently, Montenegro has signed some very important double tax treaty agreements. The most recent being with Serbia and United Arab Emirates for income and capital. Signing of such bilateral agreements not only expected to enhance further and bigger investments into Montenegro but also crucial and necessary for the small open economy such as Montenegro.

Sead Dado Salkovic (sead.salkovic@eurofast.eu)

Eurofast Global Podgorica Office/Montenegro

Tel: +382 20 228 490

Website: www.eurofast.eu

More from across our site

The Cypriot government is set to increase tax certainty and make Cyprus more attractive to foreign investment after finally passing TP legislation aligned with OECD standards.
Amazon, Cisco, and Microsoft’s largest investors are lobbying for the GRI tax transparency standard, but this could be the start of a trend in shareholder activism.
Companies are waiting for the Canada Revenue Agency to provide more guidance on TP following the Cameco case, particularly over the issue of recharacterisation.
ITR is delighted to reveal all the shortlisted firms, teams and practitioners – winners will be announced on August 25
Multinational enterprises run the risk of hefty penalties if the company in question fails to register for VAT when providing electronic services in South Africa.
Tax directors have urged companies to ensure they have robust tax risk management controls when outsourcing tax functions.
Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree