28. 01. 2025.
Agriculture is a key sector in Montenegro, and the government recognizes the importance of investing in this industry through various tax reliefs and exemptions. If you are a legal entity investing in agricultural production or an agricultural holding, you can take advantage of several benefits that can significantly support your development and business operations.
Below, we will explain how you can utilize tax reliefs, what the advantages are, and what conditions must be met to qualify for these benefits.
WHO CAN QUALIFY FOR TAX RELIEFS?
According to the Corporate Income Tax Law, legal entities that invest funds in agriculture can benefit from tax reliefs. Legal entities that reinvest funds from their realized profit into agricultural projects have the right to reduce their calculated corporate income tax by the amount of the reinvested funds.
Additionally, there are further tax reliefs if legal entities invest funds into other entities engaged in agricultural production. This tax is reduced by the amount of the invested funds, providing significant support for agricultural development.
WHAT ARE THE CONDITIONS FOR RECEIVING TAX EXEMPTIONS?Although tax reliefs are beneficial, there are certain limitations and conditions that must be met:
HOW TO APPLY FOR TAX EXEMPTIONS
A legal entity wishing to take advantage of tax reliefs must submit a request to the competent tax authority within 60 days of the end of the fiscal year from which the profit is reinvested.
A legal entity that invests funds in other entities must submit a request to the competent tax authority within 60 days of the investment being made.
COMMISSION FOR MONITORING TAX BENEFITS
The Government of Montenegro establishes a commission responsible for monitoring the use of tax reliefs and ensuring the proper implementation of this law. The commission has the right to supervise all aspects related to the realization of tax exemptions, providing additional security and transparency.
WHAT CONSTITUTES AN AGRICULTURAL HOLDING?
To qualify for tax reliefs, you must be part of an agricultural holding. According to the law, an agricultural holding is an organizational and business entity that includes one or more production units and engages in agricultural activities.
The holding must have unified management, a name or business entity, and a registered address or headquarters. Various forms of agricultural holdings include:
Tax reliefs for agricultural holdings in Montenegro provide significant support to those investing in agricultural projects. By utilizing these reliefs, your company or holding can significantly reduce corporate income tax and reinvest funds into further development. However, it is crucial to comply with legal requirements, including registration in the Agricultural Holdings Register and adherence to the tax exemption limits.
