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Accounting, Payroll and Business Compliance
Timely, accurate and transparent books of account tailored to management, foreign owners and tax obligations.
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Tax Advisory and Transfer Pricing
OECD Guidelines
Preventive identification of tax risk, lawful optimization and professional transfer pricing documentation.
What We Do
- Tax health check and analysis of the tax treatment of transactions.
- Interpretation of double taxation treaties and withholding tax.
- Transfer pricing studies: Local File, Master File and TP Lite where applicable, in line with OECD guidelines and Montenegrin requirements.
- Comparability analysis and method selection.
- Analysis of tax residency for foreign individuals and companies.
How We Work
Step 01
Analysis of Related-Party Transactions
Identification of transactions and relevant tax issues.
Step 02
Methodology and Comparable Data
Selection of methods and preparation of comparability analysis.
Step 03
TP Report
Preparation of transfer pricing documentation.
Step 04
Support During Tax Proceedings
Expert support during tax audits, where applicable.
Who is this service for?
- Companies with related-party transactions
- Subsidiaries of international groups
- Companies with cross-border services, interest or licences
- Foreign individuals with tax residency questions
- Companies undergoing or preparing for a tax inspection
- Investors checking a tax position before a transaction
When and why
Transfer pricing documentation is prepared for the business year in which related-party transactions took place. If it is only prepared at the request of the tax authority, there is far less room for argument than when it is prepared in advance.
Tax advice is also needed when a structure changes: a new owner comes in, cross-border services are provided within the group, financing is arranged through related-party loans, or profit is distributed. Each of these decisions has tax consequences that are easier to plan for than to correct.
For individuals, the most common question is tax residency and avoiding double taxation, especially when a person resides in Montenegro but earns income from several countries.
Areas of work
- Transfer pricing documentation (Local File, Master File)
- Functional and comparability (benchmark) analysis
- Selection and application of transfer pricing methods
- Corporate income tax and tax positions
- VAT matters and cross-border services
- Tax residency of individuals and legal entities
- Application of double taxation treaties
- Support during tax inspections and proceedings
Zirex expertise
In our practice, tax advice draws on audit and accounting experience, so tax positions are assessed against the documentation the client actually has available. For groups with cross-border transactions, TP studies are prepared in cooperation with the team responsible for reporting, so that the data and explanations remain consistent.
Frequently asked questions
What is transfer pricing?
Transfer prices are the prices at which related parties transact with each other — sales of goods, provision of services, loans, licences or intra-group charges. Tax regulations require these prices to comply with the arm's length principle, meaning they should be comparable to prices that unrelated parties would agree in similar circumstances.
Who needs transfer pricing documentation?
Documentation is relevant for companies that had related-party transactions during the business year, in the scope and form prescribed by applicable tax regulations. A practical approach is to check the obligation and prepare documentation as soon as intra-group transactions exist, since it is often requested later with short deadlines.
What are the Local File and Master File?
The Local File describes the local company, its related-party transactions and the analysis supporting that the prices are market-based. The Master File provides an overview of the entire group: structure, business model, intangible assets and financing. Together they show that the local price was not set in isolation, but within the group's overall business logic.
How is it demonstrated that a price is at market level?
Through functional analysis, selection of the appropriate transfer pricing method, and comparability analysis based on data on unrelated companies or transactions. The result is a range of market values within which the price should fall, or a justification for any deviation. This analysis reduces the risk of a tax base correction but does not exclude the possibility of a different position by the tax authority.
What is tax residency?
Tax residency determines which country has the right to tax a person's total income. For individuals, it is assessed based on residence and the centre of vital interests; for legal entities, based on registered office and place of effective management. For income earned in multiple countries, double taxation treaties apply.
Do you assist during a tax inspection?
Yes — by preparing and organising documentation, analysing disputed positions and supporting communication with the tax authority. The outcome of the proceedings cannot be guaranteed, but a well-documented and consistent tax position materially reduces the risk of a correction.
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