Finance Minister Novica Vuković and Czech Ambassador to Podgorica Janina Hrebičkova today signed an agreement between Montenegro and the Czech Republic on the elimination of double taxation regarding income taxes and prevention of tax evasion and avoidance.
The Ministry of Finance announced that the agreement was signed with the aim of enhancing economic cooperation between the two countries and facilitating mutual business operations.
“The agreement, which will improve trade exchange and investments, among other things, stipulates that taxation of dividends, interest, and royalties shall be applied not only in the country of residence but also in the country of source, according to agreed tax rates,” the statement said.
It is also stated that interest is exempt from taxation in the contracting state in which it arises if it is earned or actually possessed by the government of the other contracting state, the central bank, or other state or any financial institution wholly owned by that government, along with a list of such financial institutions.
“At the signing, it was jointly noted that this type of agreement, in addition to streamlining administrative processes and simplifying procedures, acts as an incentive for investments and international trade and overall bilateral relations,” the Ministry of Finance said.
From that government department, it was stated that the agreement signed today, by reducing administrative and fiscal burdens, supports existing and encourages new investments in the economies of both countries.
The signing ceremony was attended by Deputy Ambassador Petra Ali Dolakova, Deputy Head of the Department for International Taxation Martin Bores, State Secretary at the Ministry of Finance Jovana Nišavić, as well as the Director-General of the Directorate for Tax and Customs System in that department, Biljana Peranović.
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