Montenegro Initiates Double Taxation Treaty Negotiations with Romania

The Montenegrin government has officially approved the commencement of negotiations with Romania for a new income and capital tax treaty. This decision, made on October 28, 2026, includes the approval of a draft treaty document to serve as the foundational basis for discussions. The primary objective of this proposed agreement is to eliminate double taxation on income and capital for individuals and businesses operating in both jurisdictions. For multinational corporations and businesses engaged in cross-border activities between Montenegro and Romania, this development is significant. A ratified Double Taxation Agreement (DTA) typically clarifies tax responsibilities, reduces withholding tax rates on dividends, interest, and royalties, and provides mechanisms for resolving tax disputes, thereby fostering a more predictable and favorable environment for international trade and investment. It also helps prevent tax evasion and ensures fair allocation of taxing rights between the two countries.