The Parliament of Montenegro, in its regular session held on December 29, 2023, adopted the Amendments to the Law on Profit Tax of Legal Entities which were published on December 31, 2023, in the Official Gazette of Montenegro No. 125/23.
The aforementioned Amendments arise from the process of aligning domestic tax laws with EU directives. The purpose of the Amendments is to bring all laws into compliance with the EU Council Directive 2009/133/EC on the common system of taxation that governs transfers of assets and shares of companies between different EU member states, mergers, divisions, and partial divisions, as well as the relocation of the European Economic Society or European Cooperative’s headquarters from one EU member state to another.
Under the Amendments to the Law on Profit Tax of Legal Entities the definition of the capital gain has been amended, so now the capital gain considers the income that the taxpayer realizes through the sale or other transfer of land, buildings, property rights, shares in capital, and securities with or without fee.
There are also other amendments regarding the amortization rates, a new form of income that is subject to withholding, etc.
With these Amendments to the Law on Profit Tax of Legal Entities, the national legislation will be harmonized with the EU Directive, International Accounting Standards, International Financial Reporting Standards and will reduce tax evasion.