Montenegro recently adopted the Act on Write-Off of Interest on Overdue Tax Liabilities. The legislation came into force on 21 September 2024, and it will apply from 1 January 2025. Its aim is to incentivise taxpayers to clear their outstanding tax liabilities as part of the government’s broader effort to improve tax collection.
Eligible tax liabilities
The legislation offers taxpayers the write-off of total accrued interest on their tax liabilities that are due or will have fallen due by 31 December 2024. Eligible for interest write-off are all tax and quasi-tax liabilities imposed at the national level.
The tax relief in the form of interest write-off does not automatically apply to local taxes. However, local self-governments may choose to adopt regulations for the write-off of interest on local taxes. If such regulations are enacted, they will establish a deadline, which cannot be longer than 60 days from the enactment of the municipal regulation, in which the taxpayer will have to settle the principal tax debt to qualify for the interest write-off.
Conditions for interest write-off
The right to interest write-off can be exercised by taxpayers who:
- submit the relevant tax returns by 31 December 2024; and
- settle the full amount of principal tax debt until 2 March 2025.
Taxpayers whose tax debt has been reprogrammed under the Act on Tax Debt Reprogram (“Official Gazette of Montenegro” no. 145/21) may also qualify for the interest write-off if they settle the principal amount of the reprogrammed debt by 31 December 2024.
Procedure
Taxpayer must submit a formal request for the interest write-off to the competent tax authority until 2 March 2025. The Ministry of Finance is still to prescribe the specific form and content of the request.
For taxpayers who have no outstanding principal tax debt as of 31 December 2024, any unpaid accrued interest on the tax liabilities that were due and settled before that date will be written off ex officio, without the taxpayer having to submit a formal request.
This Newsletter is published for information purposes only and does not constitute legal advice. For more information or assistance with the interest write-off application process, please contact office.cg@bdkadvokati.com.
Photo by Katie Harp on Unsplash
