New Law on Property Transfer Tax applicable as of 1 January 2014

New Law on Property Transfer Tax (the Law) was published in the Official Gazette of Montenegro number 36/2013 as of 26 July 2013.

The Law is effective as of 1 January 2014. Provisions of the prior Law on Property Transfer Tax (“Official Gazette of Montenegro”, no. 69/03 and 17/07) cease to apply as of 1 January 2014.

We would like to reiterate that the most important novelty introduced by the Law relates to introduction of the self-assessment system. Namely, as of 1 January 2014 property transfer tax is declared and paid via self-assessment. Taxpayer is obliged to assess tax, submit the tax return and pay property transfer tax due within 15 days from the day when tax liability arises (e.g. date of the agreement, etc.).

Up to 31 December 2013 (inclusive) property transfer tax is paid in line with the Tax Authorities assessment.

The new Law prescribes that all procedures for assessment of property transfer tax initiated prior to 31 December 2013 can be finalized in line with provisions of the new Law if this would be more favorable for the taxpayer.

We remain at your disposal for any additional information you may require.

KPMG Tax & Legal Department