Montenegro Introduces Global Minimum Tax, VAT Amendments and New Tax Treaty

Photo: Karanovicpartners

On 26 November 2025, Montenegro’s Ministry of Finance launched a public consultation on the draft Law on Global Minimum Corporate Income Tax (GMCIT), aligning the country with the OECD Pillar Two framework and EU Directive 2022/2523. The law is expected to apply from 1 January 2026.

What the GMCIT is

The GMCIT is a Qualified Domestic Minimum Top-Up Tax (QDMTT) designed to ensure a 15% minimum effective tax rate for multinational enterprise groups and large domestic groups operating in Montenegro.

The draft law does not introduce the Income Inclusion Rule (IIR) or the Under-Taxed Profits Rule (UTPR), relying instead on a domestic top-up mechanism.

Scope of application

The tax applies to multinational and large domestic groups with consolidated annual revenue of at least EUR 750 million in at least two of the four preceding fiscal years.

Under the de minimis rule, no GMCIT is due if:

average local revenue is below EUR 10 million, and

total profit is below EUR 1 million.

Calculation and administration

The effective tax rate is calculated based on financial accounting income adjusted under GLoBE rules. If it falls below 15%, Montenegro levies a domestic top-up tax.

A top-up tax return must be filed electronically within 18 months after the end of the reporting fiscal year.

VAT amendments aligned with EU law

The proposed VAT amendments further align Montenegro’s VAT system with EU Directive 2006/112/EC, introducing changes to:
- taxation of construction land,
- place-of-supply rules for digital and data services,
- VAT registration obligations for foreign suppliers,
- a new EU-style VAT number with the prefix ME, effective 1 January 2026.

New tax treaty with Liechtenstein

Montenegro and Liechtenstein signed a Double Tax Treaty on 25 September 2025, setting withholding tax rates at:
- dividends: 5% / 10%,
- interest: 5%,
- royalties: 5%.

The treaty will enter into force following ratification and is expected to apply from 2026 or 2027.

Investor outlook

Montenegro’s reforms signal a strategic alignment with global tax standards while preserving investment attractiveness through a domestic-only top-up tax model.

According to International Investment experts, Montenegro’s approach balances OECD compliance with investor certainty, positioning the country as a stable and EU-aligned jurisdiction ahead of 2026.