Montenegro

Tax credit for newly established businesses in underdeveloped municipalities

Newly established companies conducting business activities in underdeveloped municipalities are entitled to an eight-year tax credit. The tax credit for eight-year period is capped at EUR 200,000.

The tax credit is also available to a taxpayer's business unit operating in underdeveloped regions, in the amount proportional to the profit generated by such unit in the taxpayer's total profit.

This relief is not available to taxpayers operating in the sectors of (i) transport, (ii) shipbuilding, (iii) steel production, (iv) trade, and (v) the hospitality industry, except for primary hospitality businesses.

Tax credit for beneficiaries of R&D incentives

The tax credit for the corporate income tax liability is provided for beneficiaries of R&D incentives in accordance with the law governing R&D incentives.

Tax credit for reinvestment in agricultural projects

A taxpayer who reinvests their profits in agricultural projects is eligible to reduce their corporate income tax liability by the amount of reinvested funds. This tax credit is also available to taxpayers who invest their funds in other agricultural entities.

To apply for tax relief, taxpayers must be registered in the Agricultural Farms Register.

The tax relief is capped at EUR 300,000 over a period of three years.

Tax exemption for NGOs

NGO registered for conducting business activity are entitled to reduce their corporate income tax base by EUR 4,000, provided that they use their profit to achieve the objectives for which the NGO was established.

The tax exemption is limited to the total amount of the tax base.

Foreign tax credit

Resident taxpayers are entitled to a tax credit for corporate income tax paid on income sourced in another country. The tax credit is available in the amount equal to the tax paid in a foreign country, but is limited to the amount of tax that would have been paid in Montenegro.