Koprivica's Office: Tax Administration identifies irregularities with Bemax following Deputy Prime Minister’s report

On 17 June 2024, following a conducted analysis, I submitted an Initiative to the Tax Administration for the application of Article 37e, Paragraph 3 of the Income Tax Law, regarding the evident abuse carried out by the former and new owners of the company BEMAX. Their clear intention was to evade taxes, inflict significant damage to the state budget, and circumvent the legal system—something that, in the name of justice and the rule of law, must not be allowed. On 3 March 2025, I received a notification from the Tax Administration confirming that actions were taken in this case, yielding a positive outcome for the state, the budget, and the public interest, stated Deputy Prime Minister Momo Koprivica.

Koprivica emphasized that this outcome confirms the legitimacy and validity of the initiative, serving as evidence of the fight against abuses. More importantly, he described it as "an indicator that our institutions, such as the Tax Administration, are undergoing substantial reforms, evolving into professional, robust, non-selective, and independent bodies."

To recall, in this case of a blatant attempt to circumvent the law, Veselin Kovačević, the former owner of Bemax, and Ivan Ubović signed a contract on 1 July 2022, transferring ownership for a price of €750,000. The contract states that Kovačević established the company in January 2007 with an initial capital of only €12,000 and later contributed an additional €300,000, along with non-monetary assets worth €437,800, totaling an investment of €749,800. According to the law, this is considered the acquisition price—the value of the founder's stake at the time of establishment, increased by subsequent capital contributions.

If the difference between the selling and acquisition price is positive, it constitutes a capital gain subject to taxation. In this case, when the acquisition price of €749,800 is subtracted from the selling price of €750,000, it results in a profit of just €200. According to the Income Tax Law for individuals, this amount is subject to taxation. Therefore, based on this transaction, Montenegro's budget was only expected to receive €30, as the applicable tax rate at the time was 15%.

At the same time, according to official financial reports, Bemax had fixed assets worth €120 million by the end of 2021—the year preceding the sale. The total capital of the company was estimated at €142 million, and it had retained earnings of €141 million from previous years. Bemax also reported a net profit of €14 million in 2021 and €27.5 million in 2020.

All this indicates that Kovačević sold his company for less than 1% of its actual value or total capital. In other words, the selling price represented only 5% of the company's previous year's net profit, Deputy Prime Minister Koprivica stated.

In a video statement on the matter, he argued that the declared sale price in the contract was obviously falsified, artificially reduced to minimize tax obligations to the state. Those who have long benefited enormously from the system attempted to cheat the state out of what rightfully belongs to it by manipulating legal provisions and fabricating false data. This is not only unlawful but the height of ethical degradation, Koprivica declared.

According to the notification from the Director of the Tax Administration, the institution's Large Taxpayers Sector conducted an inspection into the accuracy of capital gains tax calculations, declarations, and payments related to the sale of shares in company BEMAX from Podgorica.

Following the inspection, Report No. 06/02-29/2-24 was issued on 16 January 2025, and Decision No. 06/02-29/4 was issued on 20 February 2025. This decision established a taxable base through assessment, determined the tax obligation, and imposed interest on unpaid tax.

Therefore, the Deputy Prime Minister emphasized that "based on evidence and the proper application of regulations, the submitted initiative has yielded results, bringing tangible benefits to the state. The fight against abuses not only ensures justice but also generates significant revenue for the budget—funds that will be used to build schools, roads, kindergartens, hospitals, and other essential infrastructure that our society has been deprived of for decades due to the absence of the rule of law."

Koprivica concluded that "everyone must be held accountable before the law, and no one should be exempt from it," as this is the foundation of a prosperous and successful Montenegro. If we care about the future of Montenegro's children, we must reclaim what belongs to the state and apply the law equally to all, he asserted.

The Deputy Prime Minister further stated that the professional and impartial work of the Tax Administration, under the leadership of Mr. Laketić, along with the Large Taxpayers Sector and the Chief Tax Inspector, instills hope and confidence in the strengthening of institutions and the rule of law. He emphasized that their dedication deserves the highest respect from all segments of society.

Brave and honorable professionals are the guardians of Montenegro, and the fight against corruption will not stop, Koprivica concluded in his statement.