The Montenegro Parliament, on its 26th convocation on October 11 2017, adopted the Law ratifying the agreement signed between Montenegro and Republic of Portugal on the avoidance of double taxation and prevention of tax evasion.
The taxes to which this convention applies include the Montenegrin corporate profit tax and personal income tax as well as the Portuguese personal income tax, corporate income tax and surtaxes on corporate income tax.
The main withholding tax rates with respect to dividends, interest and royalties are mentioned below:
Dividends will be taxed with a withholding tax rate of 5% of the gross amount if the beneficial owner is a company holding at least 5% of the capital of the company paying the dividends or 10% in all other cases;
Interest paid to a resident of the other state may be taxed in the state in which it arises at a maximum rate of 10% of the gross amount of the interest; and
Royalties arising in one state and paid to a resident of the other state may be taxed in the origin country at a rate of 5% or 10% of the royalties.
The signing of the treaty is expected to contribute to the further development of the economic relations between Montenegro and Portugal. The treaty will remain in force for an unlimited period of time.
Jelena Zivkovic (jelena.zivkovic@eurofast.eu)
Eurofast
Tel: +382 20 228 490
Website: www.eurofast.eu