The Government of Montenegro gave a positive opinion on proposed amendments to the Law on Global Minimum Tax on the Profits of Legal Entities at its 1 October meeting. It warned that, without proper implementation of the system, other countries could gain the right under their own rules to collect top-up tax on profits earned in Montenegro. The framework sets a 15% minimum effective tax rate.
The existing system covers multinational groups and large domestic groups with annual consolidated revenue of at least 750 million euros. The government links its support for the amendments to preserving domestic tax revenue and preventing profits from being shifted to countries with lower tax rates. MPs Seid Hadžić and Milan Zečević submitted the proposal, which is intended to clarify the system’s application and align it with European Union rules.
One proposed change addresses how tax liabilities are divided among members of a group, including when calculations are repeated. The government supports a clearer allocation because it considers that necessary for correctly determining, reporting and collecting the tax. The revisions would also specify the country to which profits and covered taxes are attributed.
For entities connected to two jurisdictions, more precise location rules are intended to reduce differing interpretations and calculation errors. Another clarification would separate an entity’s accounting result from profit determined under global minimum tax rules. That distinction affects the calculation of the tax base, the effective tax rate and any top-up tax owed.
Filing deadlines would differ between the first year of the law’s application and later years. The government backed an 18-month period for submitting tax returns only in the first year, to give taxpayers time to adjust records, obtain data from other members of an international group and prepare returns under the new rules. The proposed deadline for subsequent years is 15 months.
