Transfer pricing in Montenegro, for international groups.

Transfer pricing rules are set out in Arts. 38-38c and transitional Art. 44b of the Corporate Income Tax Law. The content of the documentation is set by the Instruction on determining transfer prices of transactions (Official Gazette of Montenegro 121/2022). The OECD Transfer Pricing Guidelines are the international standard for method selection and comparability.

Amendments published in Official Gazette 104/2026 apply from 1 January 2027.

Under Art. 38, a person is related to the taxpayer if it:

• directly or indirectly holds at least 25% of the taxpayer's shares or ownership interests; or
• has actual control over the taxpayer's business decisions, which exists with at least 25% of the voting rights, a right to at least 25% of the profit, or a family relationship.
• Legal entities in which the same persons participate in management, control or capital are also related, as are non-resident legal entities referred to in Art. 29(5)-(6).

Full documentation contains a group and business analysis, a functional analysis, the choice of method, a conclusion and annexes (Art. 10(1) of the Instruction). A benchmark analysis is added where the chosen method requires one.

A taxpayer that is not a large taxpayer may keep simplified documentation where transactions with a related party do not exceed EUR 75,000 a year (Art. 38c(3)). It contains a description of the transaction, its value and the related party (Art. 10(5) of the Instruction). €75,000 is not a threshold below which no documentation is needed.

• 31 March 2027: corporate tax return for 2026 (Art. 40). As a rule, large taxpayers submit the documentation with the return and other taxpayers must hold it at that point (Art. 38c).
• Transitional Art. 44b moves that deadline to 30 June of the following year “until 2027”; whether it applies to the 2026 documentation should be checked against the amendments in Official Gazette 104/2026.
• 45 days from receipt of a Tax Administration request: submission by taxpayers that are not large taxpayers.

Art. 42a sets fines of €1,000-20,000 for the company and €500-2,000 for the responsible person for three offences: a large taxpayer not submitting documentation with the return; a taxpayer that is not large not holding documentation and not submitting it within 45 days of a request; and corporate tax not calculated in line with the law. A tax base adjustment is also possible.

Corporate income tax is progressive (Art. 28(2)): 9% up to €100,000; €9,000 plus 12% of the amount above €100,000, up to €1,500,000; €177,000 plus 15% of the amount above €1,500,000.

CbC reporting applies to fiscal years starting on or after 1 January 2024 for groups with consolidated revenue of at least €750 million in the previous fiscal year. The Montenegrin group member notifies the Tax Administration, no later than the day it files its corporate tax return, which entity files the report and where; a new notification is needed only when this changes.

Local filing of the CbC report is suspended for group members that are not the ultimate or surrogate parent. Montenegro signed the CbC MCAA on 14 May 2024.

Schule in Podgorica prepares Montenegrin transfer pricing documentation (Local File), benchmark analyses and support during tax audits, and aligns local documentation with the group's Master File and TP policy. We also cover Serbia and Bosnia and Herzegovina.