Montenegro’s signing of the OECD’s BEPS (Base Erosion and Profit Shifting) Convention is a milestone in the country’s journey toward tax transparency, rule-of-law harmonisation and EU alignment. The agreement is one of the world’s most important multilateral tax instruments, designed to limit aggressive tax planning and profit-shifting by multinational corporations. Montenegro’s participation signals a shift toward a more disciplined and internationally integrated tax environment.
The country’s current tax model, frequently cited as competitive due to low corporate rates and a simple administrative structure, has occasionally raised concerns among international organisations about vulnerabilities to abuse. While these concerns have not reached the levels seen in more aggressive tax jurisdictions, Montenegro’s rapid expansion of foreign-owned companies and rising inflows from diverse sources have prompted regulators to modernise their tax oversight framework.
By joining the BEPS Convention, Montenegro commits to implementing treaty measures that close loopholes previously exploited by companies shifting profits to low-tax environments. It also strengthens dispute-resolution mechanisms, mutual administrative assistance and transfer-pricing alignment. This is particularly relevant as foreign-owned enterprises now account for a growing share of Montenegro’s value-added.
Tax experts note that while the BEPS Convention does not overhaul Montenegro’s underlying tax rates, it does transform the transparency and compliance expectations placed on multinationals. For serious investors, this brings advantages. Predictable tax enforcement, reduced risk of treaty abuse investigations and greater alignment with EU norms send a clear message: Montenegro is committed to being a reputable investment destination, not a tax arbitrage outpost.
The move may also affect certain investment models. Real-estate structures, holding companies and service-outsource entities that previously benefited from flexible profit-allocation rules may now face tighter regulatory scrutiny. However, the broader impact is likely to be positive: investors favour jurisdictions with clean reputations, stable expectations and treaty protections.
For the government, adopting BEPS measures enhances credibility at a crucial moment in the EU accession process. Chapters related to taxation, company law and financial control require demonstrable progress, and alignment with OECD standards will strengthen Montenegro’s negotiating position. It will also improve the country’s standing with international lenders, including the IMF, EBRD and World Bank.
Ultimately, the BEPS Convention positions Montenegro to enter the next decade with a stronger, more transparent tax regime. In a competitive region where investment flows often hinge on regulatory predictability, Montenegro’s move signals that it is ready to operate by the highest global standards.
