Navigating Montenegro’s New EU-Aligned Corporate & Tax Administration Laws

Overview of the Regulatory Shift

Montenegro recently enacted amendments to multiple tax laws aimed at aligning with EU legal norms, particularly focusing on:

• Law on Tax Administration
• Corporate Income Tax Law
• Value Added Tax legislation

These changes were published in the Official Gazette (“Službeni list Crne Gore” No. 104/26, 17 July 2026) and will take effect immediately upon publication, though specific parts (like parts tied to corporate withholding) apply from 1 January 2027. (gov.me)

What’s New:

1. Tax Administration Updates

   • Establishment of a Central Contact Office (Centralna kancelarija za vezu) to strengthen exchange of information in tax matters. (gov.me)
   • Changes to how default interest (zatezna kamata) is set and calculated. Clearer rules for applying interest to overdue tax liabilities. (gov.me)

2. Corporate Tax & Withholding

   • Clarifications on withholding tax on loans and advances, especially between related parties. Non-residents subject to specific obligations for tax at source. (gov.me)
   • Certain provisions only become operational from 1 January 2027, giving businesses time to prepare. (gov.me)

3. Value-Added Tax (VAT)

   • Changes for VAT laws to track intra-EU transactions, harmonizing with EU VAT directives. More precise rules around VAT on supplies between EU member states vs non-member states. (gov.me)

Practical Guidance for Businesses

• Review all contracts, especially cross-border or intra-company loans, to ensure proper withholding clauses are included or that tax is handled per new definitions.
• Update internal policies: payment cycles, interest charges, reporting of foreign transactions must align with law changes.
• Talk to an EU tax advisor if you operate EU–Montenegro trade to confirm VAT liability on cross-border supplies under the new rules.
• Watch implementation deadlines: the earlier rules apply immediately, but some only from January 2027. Plan ahead.

Example Situations

• A foreign company lending to its Montenegrin affiliate must now evaluate whether withholding tax applies; if yes, ensure sufficient net receipts or gross-up clauses.
• A Montenegrin business supplying services to an EU country: reassess whether VAT was treated correctly, and update invoices, registration as needed.

Risk Management & Compliance Steps

• Perform an audit of existing tax position: list all nonresident payments, loan arrangements, cross-border supplies.
• Set up staff training on the new rules for interest calculation, invoice issuance, and reporting.
• Ensure accounting files are ready to demonstrate compliance if audited.

Why It Matters

These changes are about more than tax rates—they represent a legislative alignment with EU standards, which is essential for Montenegro’s EU accession goals. Firms that adapt proactively will face fewer surprises, smoother cross-border trade, and improved credibility with investors.