Service · Local File
Transfer pricing study in Montenegro: a Local File ready for a tax audit
A study that defends profit, not a form to be filled in. Complete TP documentation under the Montenegrin Corporate Income Tax Law (Arts. 38-38c), Instruction 121/2022 and the OECD Guidelines 2022.
We reply on the next working day. We name the fee in writing, in our reply to your inquiry. Scope and timing are confirmed in writing before work starts.
- ContentArt. 10, Instruction 121/20222
In short
A transfer pricing study (Local File) shows that prices between related parties are in line with the arm's length principle.
Under Art. 10 of the Instruction (Official Gazette of Montenegro 121/2022) it contains a group and business analysis, a functional analysis, the choice of method, a conclusion and annexes.
As a rule, large taxpayers submit it with the corporate income tax return, and other taxpayers must hold it at that point and submit it within 45 days of receiving a request (Art. 38c). Transitional Art. 44b moves that deadline to 30 June “until 2027”; whether it applies to the 2026 documentation should be checked against the amendments in Official Gazette 104/2026.
IWho it is for
Who needs this?
Companies legally required to have TP documentation
Multinational companies (MNCs) with entities in Montenegro
Groups of companies with intra-group sales, services or loans
Regional groups operating in Montenegro, Serbia and BiH that need coordinated documentation
Companies under tax audit requiring expert defence and representation
01Service
What a Local File is and why the Tax Administration asks for it
The Local File is the main part of TP documentation. It describes the specific taxpayer in Montenegro: its related companies, its transactions with them, the functional analysis and the economic justification of the prices.
IIWhat you get
What a full study contains (6 parts)
Our studies follow the content set out in Article 10 of the Instruction on determining transfer prices of transactions and the OECD structure, adapted to Montenegrin tax practice.
- 01
Group and activity description
A description of the group, its activities and the markets in which it operates.
- 02
Related party identification
Identification of related parties and controlled transactions.
- 03
Functional analysis
Functional analysis (functions, risks, assets).
- 04
Transfer pricing method selection
Choice and justification of the TP method (CUP, RPM, CPM, TNMM, PSM).
- 05
Benchmark analysis
Benchmark analysis in a database of comparable companies, with documented reasons for each rejection.
- 06
Compliance conclusion
Conclusion on compliance with the arm's length principle, with recommendations for adjustments.
15-30working days
Duration (Full study + benchmark)
€2,500 – 4,500
A full Local File with functional and economic analysis and a benchmark of comparable companies.
45days1
Deadline to submit documentation on request
Sources and the date they were checked are at the foot of the page.
IIIProcess and timing
Our process: from the inquiry to the finished study
In practice, the shortest route to a defensible study looks like this:
- Next working day
01Written reply
We establish in writing whether the obligation applies to you, where the risks are and what the fee is.
-
02Data list
We send you a checklist (financial statements, agreements, organisation chart).
- 5-7 working days
03Functional analysis and choice of method
- 5-10 working days
04Benchmark analysis
-
05Draft study
You comment, we finalise.
- within the statutory deadline
06Final study
Submission to the Tax Administration where required or requested, and the working papers archived for any audit.
IVMethodology
The Tax Administration does not ask for “a study for the sake of a study”. It asks for proof that the prices you use between related parties match the prices independent parties would agree on the market. The Local File is that proof.
What a Local File is and why the Tax Administration asks for it
VComparison
Quick risk review or full study + benchmark
| Quick risk review | Full study + benchmark | |
|---|---|---|
| What it is | A check of whether you are obliged, a list of the key risks and an indicative fee for the full study. | A full Local File with functional and economic analysis and a benchmark of comparable companies. |
| Fee | from €1,500 | €2,500 – 4,500 |
| Duration | 3-5 working days | 15-30 working days |
| Included | Check of the obligation and the form of documentation (Corporate Income Tax Law, Arts. 38-38c); Mapping of related parties and transactions; List of priority risks in an audit; Written recommendation on next steps | Functional analysis; Choice and justification of the OECD method; Benchmark + interquartile range; Rejected companies log for the audit; Local File ready by the statutory documentation deadline (deadlines and transitional Art. 44b on transferne-cijene.me) |
VIFee
Study fee
The fee depends mainly on the number and complexity of transactions, not on the size of the company.
€2,500 – 4,500
Full study + benchmark · Duration: 15-30 working days
- Quick risk review (obligation check + main points)from €1,500
- Full study + benchmark€2,500 – 4,500
- Master File + Local File for a group in the regionby agreement
- Annual update of an existing study, within the annual retainerfrom €350 /month
Scope, timing and fee are confirmed in writing before work starts. What is not included is listed in the written offer.
VIISources and legal framework
Primary sources for this page
Content prepared and checked by the Schule d.o.o. Podgorica team. The sources are in Montenegrin; this page is general information, not advice for a specific case.
Updated Sources checked
VIIIQuestions
Questions clients ask about this topic
Who prepares transfer pricing studies in Montenegro?
Schule d.o.o. Podgorica prepares the study (Local File) for companies in Montenegro through this site: functional analysis, choice of the OECD method, benchmark analysis and conclusion, under Article 10 of Instruction 121/2022. It takes 15 to 30 working days; for groups that also operate in Serbia and BiH we prepare a regional package.
Do we need a study if we have only one related company?
Yes. The obligation arises from every transaction with a related party, regardless of how many there are. If you are not a large taxpayer and transactions with that party do not exceed €75,000 a year, simplified documentation may be enough.
Can you prepare documentation for a previous year?
We can prepare documentation for a previous year based on that year's data. The statutory deadline does not change: the documentation should have existed when the return was filed (Art. 38c), and on request it is submitted within 45 days of receipt of the request.
What data do we need to provide?
Financial statements (balance sheet, income statement), the tax balance sheet, agreements with related parties, the group organisation chart, price lists and basic information on the transactions. We send you the exact checklist.
Do you keep our working papers in case of an audit?
Yes, the entire working package (benchmark export, rejected companies log, calculations) stays archived with us and is available in case of a tax audit.
Inquiry
Tell us about your related parties and transactions
IXNext step
Describe your related parties and transactions: we reply on the next working day
We reply on the next working day. We name the fee in writing, in our reply to your inquiry. Scope and timing are confirmed in writing before work starts.