By submitting an initiative to annul the contract regarding the ownership transfer of the Bemax company, the owners have effectively admitted that the agreement was fraudulent, aimed at evading taxes. By misrepresenting the sales price, they intended to pay merely 28.4 euros instead of the 30 million euros, and they failed even to pay that 30 euros. Under the Law on Obligations, there is no legal ground for terminating the contract. Consequently, they will need to pay 28.4 million euros to the state, as stated by Deputy Prime Minister Momo Koprivica to “Vijesti”.

The former owner of Bemax, Veselin Kovačević, after receiving a tax ruling to remit a capital gains tax of 28.4 million euros on the share sale of that company, has initiated a lawsuit at the Basic Court in Podgorica for the annulment of the purchase and sale contract and is now appealing the tax ruling, seeking to pause the administrative process regarding the tax ruling until the court resolves the contract termination.

In July 2022, Kovačević sold Bemax to Ivan Ubović for 750 thousand euros. The foundation for determining the tax liability stems from this contract. Experts identified that he sold a company valued at 158.2 million euros for just 750 thousand euros, asserting that the capital gains tax should be calculated based on the actual value, not the figure stated in the contract. Consequently, Kovačević’s tax liability was calculated at 23.7 million, plus interest of 4.7 million up to the present.

In December 2022, following a government proposal, the law was revised to incorporate a clause allowing the Tax Administration to ascertain the real value of sold shares and requiring it to scrutinize all such contracts dating back to 2018. Kovačević contends that this constitutes a retroactive application of the law.

“To dispel the unfounded misconceptions propagated by those affected, a few critical points must be made for public clarity. Firstly, it is wholly inaccurate to claim that a new tax was enacted retroactively, nor was there an increase in the existing tax retroactively. The narrative of retroactive tax imposition is simply a manipulation. Secondly, the law amendments merely empowered the tax authority to verify whether contracts from the last five years reflect a falsified, artificially reduced price to sidestep tax obligations. The abuse mechanism entails defining an unrealistically low price in the contract to minimize the differential between sale and purchase prices, thus lowering the capital gains tax base. Therefore, the same tax, form, and rate were retained in these revisions. The only new provision allows the tax authority to investigate contracts from previous years to unveil fraudulent agreements that would be subject to existing tax regulations, ensuring the state is not cheated of its rightful funds,” stated Koprivica, who initiated a review of this purchase contract by the Tax Office last June.

The Deputy Prime Minister elaborated that when the tax authority examines purchase and sale contracts, the previously established and unchanged tax is enforced at the same original rate—capital gains tax stands at a rate of 15%.

“To obscure their misconduct, amidst other serious concerns, they are resorting to cheap tactics, creating confusion, while visibly engaging in legal maneuvering to siphon as much as possible from the state. Their intent has been clear both during the contract’s conclusion and its attempted termination—to deceive and defraud the state. However, such maneuvers are no longer viable. According to the Law on Obligations, they lack the foundation to annul the contract in question. Thus, they will be required to remit 28.4 million euros to the state. State authorities exist to uphold integrity and the fundamental principles of the legal system.”

Kovačević sold Bemax in July 2022 to Ivan Ubović for 750 thousand euros. The basis for determining the tax liability was precisely that contract. Experts concluded that he sold the company valued at 158.2 million euros for 750 thousand euros, and that capital gains tax should be computed based on the actual valuation, not the contractual price.

Ivan Ubović is the son of businessman Ranko Ubović, whom Kovačević alleged on the show “Načisto” in November 2021 had been an informal co-owner of “Bemax” from the outset, although his name was never mentioned in any company documentation.

In his appeal against the ruling, Kovačević also notes that a procedure was initiated with the Constitutional Court to examine the constitutionality of two articles of the law that underpin the tax decision, suggesting that the determination of tax liability ought to be stayed during this evaluation.

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