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Montenegro; Plans for more transparent collection of profit taxes

The government has plans to make the collection of profit taxes in Montenegro more transparent.

The annual report by the Montenegrin competent audit state institution showed that the state budget projection has been significantly decreased and one of the main reasons for this is the unsettled corporate profit tax liabilities by entities.

In the line with the above, to prevent all occurrences of tax evasion, application of existing tax relief was underlined by the government authorities for the decree issued on deferred payment of corporate profit tax duty for legal entities.

Pursuant to this decree, an accrued liability of legal entities in Montenegro may be delayed and can be paid in six equal monthly installments. Nevertheless, in the case where the tax debt is not paid within this period, the remaining portion of the tax debt arising from the CIT is due for the immediate payment.

A request for the deferred payment of CIT needs to be submitted to the tax authority office where the company's seat is located by March 31, which is the deadline for the filling tax returns in Montenegro.

In addition, it is worth mentioning that in cooperation with (IOTA) the International Organisation of Tax Administration, Montenegro, Serbia, Slovenia, Croatia and Bosnia and Herzegovina Tax Administrations have signed, on March 17 2011, an important cooperation agreement on exchange of information and prevention of tax evasion to be able to reduce the grey economy, which is rated as the number one problem in the region.

Continued efforts and a permanent state monitoring of tax collections surely will ease the Montenegrin economy to find a way out from the hazards of economic crackdowns taking place in European markets.

Sead Dado Salkovic (sead.salkovic@eurofast.eu) and Jelena Zivkovic (jelena.zivkovic@eurofast.eu)

Eurofast Global, Podgorica/Montenegro

Tel: +382 20 228 490

Website: www.eurofast.eu

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