On June 17, 2024, after conducting an analysis, I submitted an Initiative to the Tax Administration under Article 37e, Paragraph 3 of the Income Tax Law concerning the apparent abuse perpetrated by both the former and current owners of BEMAX. Their clear aim was to evade taxes, cause significant harm to the state budget, and bypass the legal framework—actions that cannot be tolerated in the interests of justice and the rule of law. On March 3, 2025, I received a notification from the Tax Administration indicating that measures were initiated regarding this case, resulting in a favorable outcome for the state, the budget, and the public interest, as noted by Deputy Prime Minister Momo Koprivica.

Koprivica stressed that this outcome validates the legitimacy of the initiative, serving as evidence in the battle against abuses. He further remarked that it is “an indicator that our institutions, like the Tax Administration, are undergoing significant reforms, maturing into professional, robust, non-selective, and independent entities.”

To revisit, in this case of a clear endeavor to violate the law, Veselin Kovačević, the former owner of Bemax, and Ivan Ubović signed a contract on July 1, 2022, transferring ownership for €750,000. The contract indicates that Kovačević founded the company in January 2007 with an initial capital of merely €12,000 and later contributed an additional €300,000 along with non-monetary assets valued at €437,800, bringing the total investment to €749,800. According to legal standards, this amount is deemed the acquisition price—the value of the founder’s share at the time of establishment, increased by subsequent contributions.

If the difference between the selling and acquisition prices is positive, it constitutes a capital gain subject to taxation. In this instance, when the acquisition price of €749,800 is subtracted from the selling price of €750,000, it yields a profit of merely €200. Under the Income Tax Law for individuals, this amount is taxable. Consequently, Montenegro’s budget was set to receive only €30, as the applicable tax rate at that time was 15%.

At the same time, per official financial statements, Bemax reported fixed assets worth €120 million by the end of 2021—the year preceding the sale. The total estimated capital of the company was €142 million, with retained earnings from previous years totaling €141 million. Furthermore, Bemax announced a net profit of €14 million in 2021 and €27.5 million in 2020.

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

In a video message addressing this matter, he contended that the declared sale price in the contract was evidently falsified, artificially lowered to reduce tax liabilities to the state. Those who have long benefited significantly from the system sought to mislead the state and cheat it out of what rightfully belongs to it by manipulating legal provisions and fabricating inaccurate data. This is not only illegal but represents the peak of ethical degradation, Koprivica stated.

According to a 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 concerning the sale of shares in BEMAX from Podgorica.

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

Thus, the Deputy Prime Minister highlighted that “based on evidence and the correct application of regulations, the submitted initiative has delivered results, yielding 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 allocated for developing 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 accountable before the law, and no one should be exempt from it,” as this is the cornerstone of a prosperous and successful Montenegro. If we are concerned about the future of Montenegro’s children, we must reclaim what belongs to the state and enforce the law equitably to all, he asserted.

The Deputy Prime Minister also noted that the professional and impartial work of the Tax Administration, under Mr. Laketić’s leadership, along with the Large Taxpayers Sector and the Chief Tax Inspector, fosters hope and confidence in the strengthening of institutions and the rule of law. He stressed that their commitment deserves the utmost respect from all sectors of society.

Brave and honorable professionals are the defenders of Montenegro, and the battle against corruption will continue, Koprivica concluded in his statement.