The tax year in Montenegro is the calendar year.
Tax returns and supplementary documents (e.g. tax depreciation form) must be filed with the tax authorities by the end of March of the following year.
Payment of tax
CPT is paid by the end of March of the following year for the previous year. Alternatively, CPT may be paid in six annual instalments at the taxpayer’s request. A discount of 6% is applicable on the amount of the calculated CPT liability for the timely payment of the tax due (see the Tax credits and incentives section for additional information).
Taxation of non-residents
Montenegrin CPT Law contains specific rules for assessment and mechanisms for taxation of:
- capital gains of non-residents in transactions with other non-resident entities or resident and non-resident individuals, and
- Montenegrin-sourced income realised by non-residents on the basis of lease of movable and immovable assets from a person who is not obligated to calculate, withhold, and pay WHT (i.e. non-resident entities or resident and non-resident individuals).
The non-resident is obligated to file the tax return, via their Montenegrin tax representative (tax agent), within 30 days from generating income. Tax liability will be determined based on the decision issued by the Montenegrin tax authorities.
Tax audit process
There are no particular provisions regarding the audit cycle in Montenegro.
Statute of limitations
The right to assess taxes expires within five years after the end of the year in which the tax should have been assessed.
The right to collect taxes expires within five years after the end of the year in which tax has been determined.
Topic on focus for tax authorities
According to our best knowledge, the focus of the tax authorities is VAT (when the VAT refund is claimed), proper documenting of expenses, and WHT. Apart from this, we are expecting that in the near future the focus of the tax authorities will be transfer pricing, following trends of the countries in the region.