Montenegro

Taxable period

The tax year in Montenegro is the calendar year.

Tax returns

Tax returns and supplementary documents (e.g. tax depreciation form) must be filed electronically with the tax authorities by the end of March of the following year.

Payment of tax

CIT is paid by the end of March of the following year for the previous year.

Taxation of non-residents

Montenegrin CIT Law contains specific rules for assessment of taxation of:

• Capital gains of non-residents realised from transactions with other non-resident entities or resident and non-resident individuals, and
• Montenegrin-sourced income earned by non-residents from leasing movable and immovable assets, where the entity or person leasing the assets is not required to administer WHT.

The non-resident is obliged to file a tax return via appointed Montenegrin tax representative within 30 days from generating income. Tax liability will be determined based on the decision issued by the Montenegrin tax authorities.

Tax audit process

Tax audits are not mandatory. The periods and taxes open to statute of limitations could be subject to tax audits.

The tax audit can be performed as:

• Office control; or,
• Field control.

Office control is performed in the premises of competent authorities and represents verification of the data presented in tax returns and other relevant documentation and their comparison with data kept in the official records of tax administration. On the other hand, field control is performed in the business premises of the taxpayer with an aim to verify tax compliance and fulfilment of tax liabilities. The field control may last up to 90 working days, and the tax inspector can extend it only in exceptional circumstances.

A taxpayer is obliged to participate in the tax audit and provide information upon a request of the tax inspector.

Statute of limitations

The statute of limitations for the assessment or collection of tax liabilities is five years from the end of the year in which the tax should have been assessed or was determined.

The absolute statute of limitations is ten years from the end of the year in which the tax should have been assessed or was determined.

Taxes in focus of tax authorities

The tax authorities have historically focused on compliance with VAT liabilities (particularly when the VAT refunds are claimed), proper documentation of expenses for CIT purposes, and WHT liabilities.

We expect that the transfer pricing will become a key area of focus in the near future, following the trends of the countries in the region.