An investor has no legal restrictions on the amount of investment in startups, but if he wants to achieve an incentive measure to reduce the profit tax, that amount can be a maximum of 300,000 EUR for three fiscal years. The law does not establish a minimum amount, the Ministry of Science and Technological Development announced.
In particular, as they emphasized, it is important to follow the sequence of steps that lead to the fulfillment of the conditions for acquiring the status of a beneficiary of the incentive measure for the reduction of profit tax, as follows: investment (purchase of shares) is made in a startup that is already registered in the Register of Innovative Activities; after the signed contract, payment and registration of the change with the Central Register of Business Entities, the investor applies for registration in the Register of Innovation Activities as a subject of innovation activity – a legal entity that invests in innovation activity; after receiving the Decision on registration in the Register of Innovative Activities, the investor applies for the status of a beneficiary of the incentive measure of profit tax reduction.
Exemption from income tax is carried out when reporting financial statements for the fiscal year in which the investment was made, the Women of Influence portal reports.
- The Law on Incentive Measures for the Development of Research and Innovation (“Official Gazette of Montenegro”, No. 82/20) in Article 19, Paragraph 1 Point 3) establishes a reduction in relation to corporate income tax as a type of incentive measure, and Article 23 establishes who can exercise the right to this type of incentive and under what conditions, as well as that the calculated profit tax of these legal entities is reduced by 100% for the amount of funds invested, among other things, in shares or shares of startups and spinoffs – it is clarified.
Article 19 paragraph 1 establishes that the total amount of all reductions, exemptions or reliefs, achieved through the use of incentive measures for one legal entity or natural person, cannot exceed EUR 300,000 at the three-year level.
- Bearing in mind that the Law is harmonized with the legal framework that governs the field of state aid, special attention should be paid to whether the beneficiary of an incentive measure for the development of research and innovation is already a beneficiary of some type of state aid, due to the accumulation of state aid for the same justified costs. Also, it should be taken into account that in accordance with the Law on Business Companies, the investor and the startup become related parties – say the MNTR.
The Law on Incentive Measures for the Development of Research and Innovation (“Official Gazette of Montenegro”, No. 82/20) entered into force on the eighth day from the date of its publication in the Official Gazette, and the relevant rules are also valid – the Rulebook on closer conditions for acquiring the status beneficiaries of incentive measures for the development of research and innovation (“Official Gazette of Montenegro” No. 100/21), Rulebook on the Register of Innovation Activities (“Official Gazette of Montenegro” No. 100/21) and Rulebook on the Form and Content of the Tax Return for Determination corporate income tax (“Official Gazette of Montenegro” No. 115/22). So everything is legally regulated. To date, the Ministry of Science and Technological Development has not received a request for registration in the Register of Innovative Activities and a request for an incentive measure to reduce the profit tax of an investor.
- The exception is the application of Article 23 of this law, i.e. the exemption from mandatory social security contributions, because the law does not establish that this amount is reimbursed by the state, so the temporary solution is the reimbursement of funds from budget reserves, until a permanent solution will be determined by amendments to this law. Which are ongoing. Therefore, it is applicable, but conditional on the approval of funds from budget reserves – explained from MNTR.
According to them, the perception of the implementation of the Law on Innovation Activities (“Official Gazette of Montenegro”, no. 82/20) is excellent.
- At the moment, we have 79 subjects of innovation activities that are registered in the Register of Innovation Activities and several requests in the procedure. On the basis of this law, the Innovation Fund of Montenegro was established as an implementation body for innovation policy (implementation of innovation programs and projects to support the innovation community), in accordance with the same, the complete innovation system functions and is bound, and the provisions of the law also determine the manner of implementation and financing of innovation programs and projects. If, on the other hand, you meant the Law on Incentive Measures for the Development of Research and Innovation (“Official Gazette of Montenegro”, No. 82/20), the business community is very interested and we have already organized joint promotion of incentive measures on several occasions – they said from MNTR.
They explain that in accordance with Article 28 of the Law on Incentive Measures for the Development of Research and Innovation (“Official Gazette of Montenegro”, No. 82/20), the Ministry responsible for innovation policy – the Ministry of Science and Technology development, and the supervision of the procedure for approving financial statements is carried out by the state administration body responsible for financial affairs – the Ministry of Finance, i.e. the Revenue and Customs Administration. In accordance with Article 11 of this law, the Commission formed by the Ministry of Science and Technological Development has special powers, local media reports.