Montenegro has signed double taxation treaties (DTAs) with more than 35 countries, and this number continues to grow.
The most recently signed treaty is the one concluded with Portugal. The agreement affects individuals who are residents of one or both of the contracting states and applies to the Portuguese personal income tax, corporate tax and surtax, as well as to the Montenegrin personal income tax and corporate tax.
The agreement stipulates that dividends paid by a resident of one contracting state to a resident of the other contracting state may be taxed in that other country. The withholding tax rate for dividends is defined to be 5% of a dividend's gross amount if the beneficial owner is a company that has a minimum 5% capital of the company that pays the dividend, or 10% in all other cases.
Interest that arises in one contracting state and is paid to a resident of the other contracting state may be taxed in that other state, but can also be taxed in the country in which it arises if the beneficial owner of the interests is a resident of that state. In such cases, the withholding tax rate is 10%.
As far as royalties are concerned, the withholding tax rate is 5% for royalties related to art, scientific or literary works, and 10% of gross amount for royalties related to trademark, design or model, plan, a secret formula or its procedure.
The treaty requires ratification by both countries before it enters into force.