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VAT in Montenegro

VAT in Montenegro

Updated on Wednesday 18th January 2017

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The VAT in Montenegro is a tax applied when goods or services are sold or imported. In some countries the VAT can be applied to exports as well, but this is not the case with Montenegro. The tax amounts to a certain percentage of the value of the sold product. For the companies which have revenues exceeding 18 000 euro per year, the standard VAT rate in this country is of 19%, with possible rate reductions at 7% or even complete tax relief. A law firm in Montenegro can offer all needed assistance for the obtaining of VAT number, for VAT invoicing and any other VAT related issue.

Goods and services subject to VAT reduction in Montenegro

In Montenegro some goods and services are subject to a partial VAT exemption form 19% to 7%. Such products are:
  • Consumption products, such as those from the food industry;
  • Products from the pharmaceutical and medical fields such as medication and medical tools; 
  • Housing services such as those offered by hotels, camps and other tourist lodging;
  • Transportation services which deal with transportation of people and luggage;
  • Services which assure the public hygiene;
  • Funeral services;
  • Planting and breeding materials used in agriculture.
 
If the domain of activity of your company is among the list above, it means you can initiate a VAT partial exemption registration. Our lawyers in Montenegro can help you with the application procedure, tax planning services and with all relevant information.

Goods and services subject to 0% VAT rate or VAT tax exemption in Montenegro

Due to the Montenegrin legislation, some products and services can benefit from a 0% VAT rate. Another class of products is accorded complete tax exemption. Although in both cases the amount of money to be payed is 0, there are still some important differences. For example a 0% VAT payer can claim a credit for the VAT paid on inputs, while a tax exempt company does not have this option. 
 
Some of the services which benefit from 0% VAT tax reduction are:
  • Services offered in the maritime and air international traffic;
  • Goods used for consular and diplomatic needs;
  • Services and goods used in petroleum extractions in the sea.
 
Complete tax exemption is granted for revenues coming from services such as:
  • Banking services and financial services;
  • Health care and health services;
  • Services regarding social security;
  • Educational services;
  • Religious services, goods provided by religious institutions or involved in religious ritual;
  • Radio broadcasting services; 
  • Insurance services;
  • Entertainment games and chance games services;
 
In order to determine whether you are obliged to VAT registration and which class of VAT you should register for you might need the support of our Montenegro law firm. Please contact our local lawyers which will help you conform to the VAT rules of this country. 

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