Montenegro is preparing another significant step in the Europeanisation of its tax system, with proposed amendments to the Law on Tax Administration that would expand the powers of the Tax Administration, introduce stricter reporting duties for digital platforms and crypto-asset service providers, raise penalties for tax breaches and move the country closer to the EU model of automatic exchange of tax information.
The Government has determined the draft amendments as part of a broader alignment with EU rules on administrative cooperation in taxation. In practical terms, this is not only a technical change in tax procedure. It signals that Montenegro is moving from a relatively domestic, document-based tax-control model towards a more integrated European compliance regime, where digital transactions, cross-border arrangements, platform income and crypto-related activity become visible to tax authorities through structured reporting and data exchange.
One of the most important parts of the proposal concerns the exchange of information with EU member states. The draft broadens the scope of data that Montenegro’s Tax Administration may collect, process and share with foreign tax authorities, including information linked to cross-border tax arrangements, advance tax opinions, transfer pricing and the supplementary tax framework. This places Montenegro’s tax administration closer to EU practice, where tax transparency increasingly depends on automatic data flows rather than only on traditional inspections.
The reform is especially relevant for businesses operating through digital platforms. Platform operators would have to collect and maintain data on sellers, users and relevant commercial activities carried out through their systems. The reporting scope includes activities such as the sale and rental of real estate, parking spaces, transport services, the sale of goods and the provision of personal services. Operators would also need to track total compensation paid, the number of relevant activities for which compensation was charged, and any taxes, fees or commissions withheld from users.
For Montenegro, this is a major change because platform income has become increasingly important in sectors such as tourism, short-term accommodation, transport, online sales and personal services. The country’s economy has a large service component, a high exposure to seasonal and digitalised tourism flows, and a growing number of individuals and small businesses using online platforms to reach customers. Under the new model, platform income would be less dependent on self-reporting and more directly visible to the Tax Administration.
Crypto-assets are another major focus of the proposal. Service providers linked to crypto-assets would be required to collect information on users and transactions, carry out verification measures and submit data to the Tax Administration for international exchange. This reflects the broader European shift under which crypto activity is no longer treated as an opaque niche outside the conventional tax system, but as a reportable financial activity that must be integrated into tax transparency frameworks.
The business effect is clear: crypto-related platforms, intermediaries and service providers operating in or through Montenegro will need stronger internal compliance systems. Know-your-customer procedures, user tax-residence checks, transaction records, reporting formats and audit trails will become central operating requirements rather than optional safeguards. The compliance burden will not fall only on large international exchanges. Local intermediaries, fintech operators, accountants, legal advisers and companies accepting or facilitating crypto-linked transactions may also need to reassess their procedures.
The draft also introduces a stricter regime for cross-border tax arrangements that may indicate tax avoidance. Intermediaries and taxpayers would be obliged to report such arrangements to the Tax Administration within 30 days. The information would then be automatically exchanged with EU member states. This is particularly relevant for corporate structures, advisory firms, holding arrangements, transfer-pricing models and transactions involving multiple jurisdictions.
For professional advisers, the change is substantial. Tax lawyers, accountants, consultants and corporate service providers will need to identify whether an arrangement falls within reportable categories and ensure timely electronic reporting. For businesses, it means that cross-border structuring will increasingly require documentation not only of legal form, but also of commercial rationale, tax treatment and disclosure obligations.
The reform also creates the possibility of joint tax controls with EU member states, including joint audits, shared documentation and exchange of evidence. This moves Montenegro closer to a European enforcement model in which tax controls can be coordinated across borders. For companies with operations, shareholders, clients or related parties in the EU, the practical risk profile changes. A transaction reviewed in one jurisdiction may become relevant in another, and documentation gaps in Montenegro could create exposure in an EU member state as well.
Another important change concerns forced collection of tax debts. Under the proposed amendments, where the sale of seized real estate fails through public auction and direct agreement, the state would be able to take over the property, while the tax debt would be reduced by one third of the property’s assessed value. This gives the state a stronger enforcement tool in cases where tax claims are secured against real estate but the market process does not deliver a buyer.
The proposal also changes the calculation of default interest. Instead of the current fixed rate of 0.03 per cent per day, default interest would be linked to the European Central Bank’s rate for main refinancing operations, increased by three percentage points. This is a more flexible and market-linked approach. It also aligns Montenegro’s tax interest logic more closely with European monetary benchmarks, which is notable given that Montenegro uses the euro but is not yet part of the euro area’s institutional framework.
The penalty regime would become significantly tougher. For legal entities, fines would rise from the current range of €1,000 to €15,000 to a new range of €4,000 to €40,000. Penalties for responsible persons and entrepreneurs would also increase several times. This is not a cosmetic adjustment. It materially raises the cost of weak reporting, incomplete records, non-compliance and delayed disclosure.
For companies, the message is direct: tax compliance in Montenegro is becoming more data-driven, more integrated with EU standards and more expensive to ignore. Businesses that operate in tourism, digital services, real estate, crypto-assets, consulting, e-commerce and cross-border trade will need to treat tax reporting as part of operational infrastructure. Internal controls, client data, transaction evidence, platform records and adviser documentation will carry more weight than before.
The amendments also fit into Montenegro’s broader EU accession agenda. Tax administration reform is one of the areas where institutional readiness matters because EU integration is not only about adopting formal laws, but also about proving that institutions can exchange data, enforce rules, protect tax bases and cooperate with member states. For investors, this makes the reform relevant beyond the tax sector. A stronger tax administration framework can support market transparency, reduce informal activity and improve the predictability of the business environment.
At the same time, the transition will require careful implementation. Digital platforms and crypto-service providers will need clear technical guidance, reporting templates and realistic compliance deadlines. Small businesses and individual users will need to understand what data is collected, how it is reported and what obligations arise from platform-based income. Without practical guidance, the reform could create confusion, especially in sectors where informal or semi-formal activity has been common.
For the financial sector, the proposal points to a deeper convergence between tax compliance, anti-money-laundering controls, digital finance regulation and EU reporting standards. Banks, payment institutions, accountants, fintech firms and platform operators will increasingly operate in the same compliance ecosystem. Data quality will become a commercial issue, not only a regulatory one, because counterparties, lenders and foreign partners will expect traceable and reportable information.
The proposed amendments are expected to enter into force on the day after publication in Montenegro’s Official Gazette. That short implementation horizon makes preparation important. Companies with exposure to digital platforms, crypto-assets or cross-border tax structures should begin reviewing data collection, client onboarding, transaction records, contracts and adviser responsibilities before the new rules become operational.
Montenegro’s tax administration is moving towards a model in which the invisible parts of the digital and cross-border economy become reportable, measurable and exchangeable with European authorities. For the state, this is a tool to protect revenue and align with EU standards. For businesses, it marks the end of a looser compliance phase and the beginning of a more demanding, data-based tax environment.
