Montenegro

A legal entity is considered to be a tax resident if it is incorporated in Montenegro. In addition, a foreign corporation may also be deemed a Montenegrin tax resident if the corporation has a place of effective management in Montenegro. No explicit rules exist for determination of effective management. In practice, it js usually the place where key managerial decisions are made or where the board of directors convenes.

Permanent establishment (PE)

Montenegrin tax legislation contains very basic PE rules that largely follow the guidelines set out in the Organisation for Economic Co-operation and Development (OECD) Model Tax Treaty. A PE is defined as a fixed place of business through which a non-resident fully or partially carries out its business activities in Montenegro, and is organised in one of the following forms:

• place of management;
• branch office;
• office;
• factory;
• workshop;
• mine, gas or oil site;
• stone pit; or,
• any other place where natural resources are exploited in Montenegro.

A construction site or installation project constitutes a PE only if it lasts more than six months.

A PE is not deemed to exist if a non-resident only has inventory stored in Montenegro for the purpose of delivering goods, or if their operations in Montenegro are of a preparatory or auxiliary nature.