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Taxation System in Montenegro

Corporate Income Tax Rate

The amount of tax applied on the local and foreign companies is at the rate of 9%

Surtax

None

Substitute minimal taxation

None

Foreign tax credit

For all the foreign income paid to the government, it will receive a tax credit for the same. However, the tax credit will be limited to the amount as per the foreign source profits.

Holding company regime

None

Incentives

Companies incorporating their office in underdeveloped region of Montenegro will be provided a tax relief vacation for eight years. The relief is subject to the companies engaged in the production activities. These companies will also be not liable for the incentive applicable on the business segments like agriculture, transport, shipbuilding, steel and fishery sectors.

Other – If any individual/entity who is a non-resident has capital gains generated then at the rate of 9% withholding tax will be applied on the income paid any legal resident entity to the non-resident; in other cases, the standard applicable taxes are observed.

Withholding Taxes

Dividends

As per the standard practice, the tax levied on the income through dividends paid to any non-resident by a resident entity would be at the rate of 9%. The rate may differ in case there is a signed tax treaty between the two parties. The income received through the dividends from foreign source will also be subject to the taxable income. However, the resident taxpayer has the flexibility to claim the tax credit for the taxes paid abroad.

Royalties

If any royalty is paid to non-resident entity then the withholding tax will be 9% but if the royalties are paid non-resident individual then the rate of withholding tax will be 5%. And if there is any tax treaty signed between the parties then the rate may be reduced.
Withholding taxes can also be levied on the service fees/income like market research, advisory or audit services provided by non-residents at the rate of 9%.

Interest

Any interest paid to the non-resident entity shall incur withholding tax at the rate of 9% (if the interest is paid to any non-resident individual then the rate of interest would be 5%). The rate of interest may be reduced if there is a pre-defined tax treaty signed between the parties.

Branch Remittance Tax

None

Wage Tax/Social security Contributions

10.3% of the employee’s salary should be contributed by the employer in the social security contribution. The bifurcation of the contribution includes
Pensions – 5.5%
Health – 4.3%
Unemployment – 0.5%

The maximum amount of contribution in a calendar year is Euro 50,000. Any benefits provided by the company to the employees is not considered in social security contributions.

Stamp duty – None

Transfer tax – 3% transfer tax will be levied on immovable properties.

Goods and services tax (GST)

The GST system of Singapore is based on a European-style VAT system. The GST is implied on the goods and services supplied by a chargeable person in Singapore and on the goods imported by the individual in Singapore.

GST in Singapore is categorized into three types for goods & services:

(1) Standard items are rated at 7% tax which includes commercial property transactions

(2) Items rated at zero include goods & services that are sold abroad

(3) Items which are exempted are the transaction and lease on residential lands, a sale of investment valuable metal and the provision of certain financial services.

The goods and services supplied domestically are standard-rated. International services and exported goods are zero-rated, but the people who supply zero-rated goods & services are still permitted to get credits or refunds for GST paid on their purchases.

Filing and Payment

From the end of a company’s financial year, it should present an estimated chargeable income to the IRAS. If the company is prompt in supplying the estimated chargeable income, then the projected tax might be paid in up to 10 installments.

Singapore Taxation and Investment 2017 (Updated June 2017) 17

The deadline for filing Singapore tax return is 30 November of the assessment year for profits produced in the previous financial year, an extension can be made till 15 December if the return is offered electronically. Usually, the taxes are to be paid within one month from the date of a notice of assessment.

From the 2020 year of assessment the IRAS will be the bringing-in electronic filing of corporate income tax returns and all companies will be essentially filed electronically

Accounting, Filing and Auditing Requirements

A Singapore company is required to register for GST if its annual sales go beyond or are expected to go over $ 1 million in any calendar year accordance with GST Law. AbroadBiz will be glad to help you with GST registration for a one-time payment.

Within 6 months of the end of the assessment year, the annual unaudited financial statements are to be submitted with the Accounting and Corporate Regulatory Authority (ACRA). Our company is an expert in accounting and bookkeeping services;

If the corporate turnover is below US$4 million and if there is no corporate shareholder then annual statutory financial audit is not necessary;

According to Section 197(1)(b) of the Accounting and Corporate Regulatory Authority (ACRA) entails a fine of S$300 for delayed filing of the annual return. The business director(s) are answerable to make sure an Annual General Meeting is held on time and the Annual Return is filed within one month of the same. Failing to comply with it is regarded as a fault and can lead to the prosecution of the director(s);

If the company comes under the category of a small company then annual statuary financial audit is not required. To be deemed as a small company, it is mandatory to fulfill 2 of the following circumstances for the earlier two periods of successive financial years:

  1. Should contain total annual profits less than SG$10 million,
  2. The overall assets should not be less than SG$10 million and
  3. The number of employees should be less than 50

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