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The Central Bank of Montenegro (CBCG) has agreed to collaborate with the enterprise crypto and blockchain solutions provider Ripple to develop a strategy and pilot programme to launch the country’s first digital currency in the form of a Central Bank Digital Currency (CBDC) or national stablecoin. Aligning with the CBCG’s core objectives, the digital currency’s introduction is another step forward to digitising financial services and fostering a world of greater financial accessibility for Montenegro’s citizens.

A CBDC is a digitised version of the currency issued by central banks. Today, over a hundred countries are exploring and developing a CBDC for many use cases including widening financial inclusion, modernising monetary policy, improving payment security and increasing cross-border payments efficiency.

Simultaneously, the European Central Bank is working to develop the Digital euro concept as a future means of safe, secure, and practical electronic payment in the euro area.

The CBCG Governor Radoje Žugić noted that “as a central bank committed to following up-to-date national banking trends, the CBCG is actively ensuring it maintains an efficient financial system. We look forward to collaborating with Ripple on the pilot project for creating CBDC or stablecoin. Through the project, the CBCG will work with the Government of Montenegro and Montenegro’s academia to create a practical digital currency or secure currency solution to test the main blockchain technology’s functionality and potential. It will also analyse the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end users’ rights and privacy.”

The project will go through several stages, including identifying the practical application of a digital currency or national stablecoin and the design to simulate its circulation and use under controlled conditions.

“The Central Bank of Montenegro is bringing the next level of digital transformation to its financial infrastructure and addressing some of the world’s biggest financial challenges, including financial inclusion,” said James Wallis, Ripple’s Vice President of Central Bank Engagements & CBDCs. “Ripple has a proven track record of successfully connecting disparate payment systems and championing blockchain’s utility to issue Central Bank Digital Currencies and solve for global payments to hundreds of financial institutions around the world. We are pleased that the CBCG has chosen Ripple to help launch its first digital currency and further address the country’s core financial objectives.”

About Ripple

Ripple is a crypto solutions company that transforms how the world moves, manages and tokenizes value. Ripple’s business solutions are faster, more transparent, and more cost effective – solving inefficiencies that have long defined the status quo. And together with partners and the larger developer community, we identify use cases where crypto technology will inspire new business models and create opportunity for more people. With every solution, we’re realizing a more sustainable global economy and planet – increasing access to inclusive and scalable financial systems while leveraging carbon neutral blockchain technology and a green digital asset, XRP. This is how we deliver on our mission to build crypto solutions for a world without economic borders.

Source: www.businesswire.com/news

Photo: www.economictimes.indiatimes.com

The Parliament of Montenegro adopted a series of changes to tax regulations that were published in the Official Gazette of Montenegro no. 152/22 of December 30, 2022.

An overview of the most significant changes and the beginning of their application is given below.

Law on personal income tax

Benefits to individuals who are not employed by the payer are considered other income. The aforementioned benefits were included in personal income before the entry into force of these changes. The payer of the mentioned other income is obliged to calculate, suspend and pay tax on income from other income simultaneously with the payment of income, applying a proportional rate of 15%.

The following are exempted from paying personal income tax:

• Beneficiary of incentive measures for the development of research and innovation, for an employed or engaged person and for a person performing an independent activity, in accordance with the law regulating incentive measures for the development of research and innovation;
• A person who earns income based on personal income or independent activity from an employer who is not registered in Montenegro, based on the acquired digital nomad status in accordance with the law regulating the residence and work of foreigners.

An anti-evasion norm is introduced when determining the tax base of tax on capital gains from the sale of shares in a legal entity. If the sales value of shares in a legal entity is lower than the market value when determining the capital gain, the sales value is determined by the competent tax authority.

The scope of application of tax on income from self-employment is specified.

The changes apply from December 30, 2022.

Law on Contributions for Mandatory Social Insurance

The right to exemption from paying contributions for mandatory social insurance is exercised by:

• Beneficiary of incentive measures for the development of research and innovation, for an employed or engaged person and for a person performing an independent activity, in accordance with the law regulating incentive measures for the development of research and innovation;
• A person who earns income based on personal income or independent activity from an employer who is not registered in Montenegro, based on the acquired digital nomad status in accordance with the law regulating the residence and work of foreigners.

The changes apply from December 30, 2022.

Law on corporate income tax

The obligation to pay withholding tax on payments made on the basis of a loan, i.e. a loan with or without interest, made by a person liable for income tax to natural persons is introduced. Withholding tax is calculated and paid at the time of loan disbursement at a rate of 15% on the gross disbursement amount.

A corporate income tax payer who concluded a loan agreement with a natural person, i.e. a loan with or without interest before the date of entry into force of this amendment to the law, is obliged to calculate and pay withholding tax after the expiry of the period for which the agreement was concluded, if they conclude contract extending that period.

The withholding tax payer is obliged to submit a report on the withholding tax paid by the end of February of the current year for the previous
year.

The changes apply from December 30, 2022.

March update

The Parliament of Montenegro adopted a series of amendments to the tax regulations related to corporate income tax, which were published in the Official Gazette of Montenegro no. 028/23 of March 10, 2023.

Law on corporate income tax changes

Payments made on the basis of a loan, i.e. loans made by the taxpayer to natural persons who do not have the status of a related party, up to the amount of EUR 5,000 per year, are exempt from tax.

A special withholding tax rate of 30% is introduced on income paid to a non-resident legal entity that is established or has its registered seat or has its seat of administration or place of actual administration in the territory with tax sovereignty. The list of territories with tax sovereignty is published by the Ministry of Finance on its website. This provision does not apply to a non-resident person who has resident status in a country with which Montenegro has concluded an agreement on the avoidance of double taxation.

Additionally, a person that is established or has a registered seat or has a seat of management or a place of effective management in the territory with tax sovereignty is considered a related person of the tax resident of the income payer.

Beneficiaries of incentive measures for the development of research and innovation in accordance with the law regulating incentive measures for the development of research and innovation are exempted from paying corporate income tax.

A new provision is introduced which defines that transactions between a permanent business unit and a non-resident head office of that business unit are subject to transfer pricing documentation.

The changes apply from March 18, 2023.

Source: https://kpmg.com/

Photo: https://montenegroguides.co/

On December 31, 2021, the Parliament of Montenegro adopted a series of changes in the area of tax regulations (“Europe Now” program).

An overview of the most significant changes is given below.

Law on corporate income tax

I Progressive taxation of profits

Progressive taxation of profits of legal entities is introduced as follows:

• Profit up to EUR 100,000 is taxed at a rate of 9%;
• Profit in the range of 100,000 euros to 1,500,000 euros is taxed at a rate of 12%;
• Profit over EUR 1,500,000 is taxed at a rate of 15%.

The withholding tax rate is increased to 15%.

II Transfer prices

A new set of transfer pricing rules is being introduced. These new rules include a new definition of related parties, an expanded list of methods used to determine arm’s length pricing, and documentation of related party transactions.

The rules regarding the recognition of interest expenses and the taxation of interest income from related parties have been aligned with the “arm’s length” principle.

Documenting transactions with related parties depends on the classification (size) of the taxpayer and the volume of transactions with related parties. The new rules foresee the following:

• Large taxpayers are required to submit documentation on transfer prices along with the annual income tax return;
• Other taxpayers (who do not have the status of a large taxpayer) are required to have transfer pricing documentation when submitting their annual income tax return. The aforementioned taxpayers are obliged to submit documentation on transfer prices at the request of the tax authority within 45 days.
• Taxpayers who do not have the status of a large taxpayer can have documentation in an abbreviated form if transactions with a related party do not exceed the value of 75,000 euros in the year for which the annual income tax return is submitted.

Taxpayers are obliged to prepare and submit (if necessary) documentation on transfer prices for the previous year by June 30 of the current year.

By-laws for the application of the new rules on transfer pricing are expected within a year from the start of the application of the new rules.

III Other changes and additions

• Special rules are introduced for the taxation of interest payments and royalties as well as the payment of dividends/profit shares between affiliated companies from EU member states. These rules will be applied from the day of Montenegro’s accession to the European Union.
• The right to reduce the tax liability by 6% is abolished.

The aforementioned changes apply from January 1, 2022 (with the exception of the rules for taxation of interest payments, royalties, dividends and profit shares between affiliated companies in EU member states).

Value Added Tax Law

The scope of application of the reduced VAT rate of 7% is extended to the preparation and serving of food, beverages and beverages, except for alcoholic beverages, carbonated beverages with added sugar and coffee, in facilities for the provision of catering services.

The aforementioned amendment shall enter into force on January 8, 2022.

Source: https://kpmg.com/

Photo: https://www.hometaxsolutions.com/

Parliamentarians adopted a set of laws within the “Europe Now” program, which caused sharp criticism.

The representatives of the Montenegrin parliament adopted today a set of laws that enable the increase of the minimum wage from 250 to 450 euros from January 1, 2022.

Health contributions are abolished, a tax-free part of earnings up to 700 euros is introduced, as well as an increase in the tax rate on earnings over 1,000 euros from nine to 15 percent, writes Beta.

Part of the opposition also voted for the laws, they were adopted with 50 votes, although the government has a total of 41 representatives.

The changes to the set of laws are part of the program called “Europe Now”, which has met with sharp criticism from the opposition, some experts, and representatives of the ruling majority.

The head of the representative club of the ruling Democratic Front (DF), Slaven Radunović, said during the discussion that the alliance will support the increase in the minimum wage because the voters asked for it, but he added that the “Europe Now” program is a gamble, a gambler’s move that could lead the country to a catastrophic state .

Minimal pensions also increased

He stated that the budget was designed in such a way that the money provided for by the “Europe Now” program can only be paid out for a few months.

In the meantime, the Government, in order to get the support of the DF, accepted the amendment of that party, so that it will not be possible to borrow the 1.4 million euros that was foreseen in the Budget proposal.

The Assembly also adopted the Proposal of the Law on the compensation of former beneficiaries of benefits for three or more children, and its application will begin on April 1, Vijesti reported.

Amendments to the Law on Child and Social Protection were also adopted, which provide for child allowances for all children up to 18 years of age with application from October 1, 2022.

As of September 1, the minimum pensions will be increased since the amendments to the Law on Pension and Disability Insurance have been adopted.

Source: https://balkans.aljazeera.net/

Photo: https://balkans.aljazeera.net/ – (Anadolija)

The first oil well will be at a depth of 6,525 meters, and the second gas well will be less deep.

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Montenegro is the first country in Europe without infected with coronavirus, it is equally the success of the state, its institutions, and each individual, as of today our country is also known on all meridians for the result it has achieved in fight against the invisible and unknown enemy, now we focus to preserve and recover our economy, jobs and standards of our citizens, and we will win this battle successfully, said Prime Minister Duško Markovic at a press conference held a day after the Public Health Institute declared that there are no more COVID – 19 patients in our country.

 

“On behalf of the Government and in my own name, I would like to congratulate everyone, who was on the first line of defence, namely: doctors, nurses and technicians, pharmacists and all health care employees; Members of the police, the security services and the Armed Forces of Montenegro, who took care for the application of measures and at the same time maintained order, peace and safety of every citizen; No less – and to all members of inspections, security services, postal officers, volunteers and employees of city services; Aircraft crews, airport services and transport workers; Employees in supermarkets and shops, who provided services on a daily basis, not allowing scenarios of endless lines, empty shelves and discomfort in our homes. I voice my due gratitude to the educators, who ensured the continuity of teaching and responded to my request, for organising the curriculum outside the classroom and from home. Therefore, our children finish school in 15 days, and do not repeat the school year! I show respect to all of you who were in quarantine and self-isolation, and to all of you who stayed at home and respected the measures and recommendations in every way – because that is how you saved yourself from others and others from yourself; This is an opportunity to say that there are more than five thousand individuals and companies that have recognised the need and made donations. And we have saved every euro attached, and from that money we will build clinics, which will serve our society and the public health! We owe gratitude to journalists and the media – because you informed about everything objectively and in a timely manner; I am grateful to the officials in the state administration and the members of the operational staffs, who demonstrated an ability to make the right decisions quickly and implement them with the necessary precision. I would also like to thank the PR team that made itself available to the Public Health Institute. Our institutions did not wait for the orders, but from the very first moment stood in defence of the citizens, their lives and health. That is the best answer to the criticism that reluctance and ignorance are living in our institutions, and the best confirmation that the state and citizens have someone to rely on,” the Prime Minister said at a press conference, broadcasted live by Montenegrin televisions.

The result we can be proud of binds us

The Prime Minister noted that we can be proud of the result, but that it obliges us to continue with a responsible attitude, in order to overcome the consequences of the economic crisis that hit us and prevent a new wave of epidemics if it occurs.

The Prime Minister pointed out that this result did not come by itself, on the contrary, and reminded of the way in which our country has opposed the pandemic in recent months.

“Let me note that the National Coordination Body met practically every other day and held 35 sessions, at which 69 orders were passed. That Montenegro managed to be – the last country in Europe where Covid – 19 was registered, without introducing of a state of emergency, and without curfew. And to be the first country in Europe to defeat it. Our strategy is to always be one step ahead. We reacted to the first appearance of the virus in European countries. Let me remind you, the first measure was adopted on 9 January, and the first restriction for passengers in international traffic on 15 January, i.e. two months before the registered case of the disease. By timely formation of the National Coordination Body, we have ensured unified crisis planning, unified coordination of institutions and timeliness in informing the public,” said the Prime Minister.

Prime Minister Duško Markovic reminded that Montenegro did not close the borders for our citizens, it provided sufficient medical equipment and protected all those who were exposed to immediate danger.

“In that way, we relieved our health care system. That was our main goal – not to fill hospitals with patients. We decided to stop the virus at the borders of Montenegro. And on the internal level – not to allow it to infiltrate into our homes. That is why we succeeded,” said Prime Minister Duško Markovic.

The Prime Minister recalled of the two adopted packages of economic measures and announced the third one, which is directed towards recovery of our economy and the assistance to entrepreneurs and citizens.

Opening of borders soon and another easing of measures

Prime Minister Duško Marković announced the opening of borders, first for the citizens of those countries that are successfully dealing with the coronavirus.

“As of today, the National Coordination Body for Communicable Diseases, with its eight operational staffs and over a hundred people involved in depth, has the task of finding the best solutions that will enable the start of our economy, that will open borders and enable arrival of tourists, as well as to further mitigate measures, which will have an impact on the internal situation and life of citizens. Our intention is to open kindergartens, preschools, playrooms, bishops and theaters as early as next week; To enable a limited audience to follow sports events, while respecting the protection measures. Christenings, weddings and family celebrations will be allowed – also with health and security measures and restrictions on the number of attendees. And in accordance with the assessment made, the opening of borders with countries that meet the appropriate epidemiological criteria of the Public Health Institute, is expected in the first days of June. Currently, it reads a maximum of 25 patients per 100,000 inhabitants and the first countries with which we will open the borders are: Croatia, Slovenia, Austria, Germany, Poland, Czech Republic, Hungary, Albania, Greece and possibly some countries in the region until the order is passed and entered into force. Global trends also pointed to the expansion of the circle of countries to which we could open the border. This will start our aircraft and air industry, encourage our tourism and enable work in related activities,” the Prime Minister stated.

Montenegro is today recognised as a Corona Free country

Prime Minister Duško Marković concluded that today the Corona Free status is the emblem of Montenegro on all meridians.

“As of today, Montenegro is special regarding the result it has achieved in the fight against the invisible and unknown enemy. Therefore, I once again congratulate the National Coordination Body on the excellent and strategic management, during the coronavirus epidemic. Today, we are already in the field of preserving and recovering our economy, preserving jobs and the standards of our citizens. I assure you that we will win this battle, as successfully, as we won the previous one to preserve the health and lives of our citizens. Let’s be responsible and in solidarity for the good of our Montenegro,” Prime Minister Duško Marković concluded at the press conference.

Partnership with citizens was the most important thing

Answering journalists’ questions, the Prime Minister emphasised that there was nothing we could have done, that we did not do. The most important decision is considered by the Prime Minister to be the visionary approach of our health system and especially the Institute of Public Health, which gave the first recommendations about two months before the first registered case in our country. The Prime Minister also assessed, the successful organisation of quarantine and self-isolation, as important.

The Prime Minister highlighted that the partnership with the citizens showed to be the key orientation. In support of that, he stated that Montenegro is a country that had among the highest degrees of freedom for citizens. “We have made the best decisions. This is a common result of both, the institutions and the individuals in them, and the citizens who have followed all these recommendations. And that is why we have the opportunity to celebrate today,” said the Prime Minister. He added that he did not propose a state of emergency, nor would he propose it in some new circumstances, because it turned out that Montenegro has the institutional capacity and that the citizens have shown loyalty and discipline.

Source: www.gov.me

Alex capital partners, Arton group and Henley and Partners Government Services have been selected as brokering agents when applying for Montenegrin economic citizenship, the Government’s Secretariat for Development Projects has decided.

The decision on the choice of agents was made on Wednesday, with a 30-day deadline for drafting the contract, which the Government should then conclude with these companies.

“21 applications were received at the Secretariat for Development Projects, and another one was received after the deadline,” said the decision signed by the Secretary of the Secretariat, Dejan Medojevic.

The public call for the selection of mediation agents, announced on January 3, stipulated that only companies whose responsible persons had not been sentenced to imprisonment for more than a year and who had at least three years of experience in three countries, of which one in the European Union.

The decision on the criteria for acquiring Montenegrin citizenship for the purpose of realization of investments is in force from January 1 this year and on the basis of it, up to 2,000 Montenegrin passports will be issued on the basis of it in the next three years.

Source: www.bankar.me

U.S. companies have expressed interest in the export of liquefied natural gas (LNG) to Europe through Montenegro’s Bar port, Montenegro’s economy minister Dragica Sekulic said on Monday.

 

 

“Negotiations have begun between U.S. and Montenegrin companies on the potential cooperation in the field of storage and distribution of natural gas from the United States,” Sekulic said in a video file posted on the website of Montenegrin public broadcaster RTCG.

Aluminium smelter KAP has already started using LNG, which has led to a significant reduction of particulate matter emissions, while steel mill Toscelik Niksic is working on replacing fuel oil with LNG, Sekulic also said.

Using the port of Bar for the transhipment and storage of LNG would have positive effects on the development of the country’s infrastructure and industry, she added.

Earlier this month, the executive director of port operator Luka Bar, Vladan Vucelic, said the company is considering building an LNG terminal to handle imports of U.S. liquefied natural gas into Europe. Luka Bar may invest in the implementation of the project alone, or through some form of partnership, he noted.

Source: www.seenews.com

Low-cost airline WizzAir is opening a new line from Podgorica to Vienna from July 3, twice a week, on Fridays and Mondays.

 

 

According to sources, it is a seasonal line, but there is a possibility that it will be extended and WizzAir maintains the line throughout the year.

Tickets can be purchased from € 19.99.

WizzAir already has flights from Podgorica to Munich, Budapest, Milan, Katowice and Warsaw.

Source: www.cdm.me

The Government of Montenegro has announced the effects of the economic citizenship project so far, on the basis of which construction of four top category hotels has started in Montenegro.

 

 

The first project on economic citizenship was approved in June this year for the construction of a condominium hotel in Kolasin, owned by Kolasin Resort & Spa.

“In November, the government accepted three more projects: the construction of a hotel in Kolasin by investors from Russia, the Queen’s Beach Hotel in Milocer by the investor “Adriatic properties” and the Durmitor Hotel in Zabljak by an investor from Greece, the Autumn Analysis of Macroeconomic Trends and structural reforms quotes.

To recapitulate, for potential investors not familiar with the program, Montenegrin government introduced the project of economic citizenship from the beginning of the year 2019., in order to stimulate investments in Montenegro.

The project defines application costs in the amount of EUR 100.000, and a minimum investment of EUR 450.000 for coastal and capital area projects, and EUR 250.000 for projects in the less developed but resource-rich northern region.

The number of applications is limited to two thousand over a three-year period.

Source: www.bankar.me