Montenegro VAT

• The standard VAT rate in Montenegro is 21%
  There are reduced rates of 7% and 0%.
• VAT is charged on sale of goods and services, as well as on imports to Montenegro.
• Exports from Montenegro are not subject to Value Added Tax.
• Income from financial services, such as insurance and banking services, investment income are exempt from VAT.
• Any business the annual turnover of which exceeds 18,000 Euro in 12 months is a VAT taxpayer (provided that he/she has a registered business or seat in Montenegro).
• VAT in Montenegro is accounted for and paid at the reduced rate of 7% on the supply of goods, services and import of goods, as follows:
  • Basic products for human consumption (milk, bread, oil and sugar);
  • Medicines (including veterinary medicine); orthotic and prosthetic tools;
  • Textbooks and teaching aids; books, monographic and serial publications; daily and periodic press
  • Services of accommodation in hotels, motels, tourist settlements, boarding houses, leisure, camps and villas;
  • Potable water, except for bottled water;
  • Services of public transportation of passengers and their personal baggage;
  • Services of public hygiene;
  • Funeral services and goods related to those services;
  • Copyrights and services in the area of education, literature and art; copyright in the areas science and art products, collections and antiques;
  • Services regarding the use of sports facilities for non-profit purposes;
  • Fodder, fertilizer, devices for plant protection, reproduction seeds, planting material and breeding stock.
• VAT is paid at the rate of 0% on:
  1. Goods that have been exported from Montenegro by the seller or exported on his behalf by another person;
  2. Supply of services, including transport and other ancillary services.
  3. Goods exported from Montenegro by a purchaser that is another person on behalf of the purchaser, who has not established a business in Montenegro, except for goods intended to supply private watercrafts, aircrafts means of transport for private use;
  4. Services performed on goods imported in Montenegro and exported by a person who has provided the service or by a client if he has not established the headquarters, business unit, i.e. a permanent or usual residence in Montenegro;
  5. Supply of services provided by representatives or other intermediaries in the name and for the account of another person, provided that those services are a part of services listed in this Article or services provided outside Montenegro. Exemption does not relate to travel agents that are providing services in the name and for account of travelers outside Montenegro;
  6. Supply of fuel and other necessary goods used for supplying:
     Vessels for open-sea sailing which transport passengers for consideration that is which are intended for performing commercial and industrial activities; sea rescue and assistance vessels;
     Military vessels leaving Montenegro, which destinations are foreign piers, that is anchorages;
  7. Goods and services used in international air and maritime traffic;
  8. Goods and services intended for:
     The official purposes of diplomatic and consular representatives;
     The official purposes of international organizations, if provided by an international treaty;
     For personal needs of foreign staff of diplomatic and consular representatives including their family members;
     For personal needs of foreign staff of international organizations including members of their families, if provided by international treaties;
  9. Medicines and medical devices, determined by the list of medicines, i.e. medical devices prescribed and issued at the expense of the Health Insurance Fund of the Republic;
  10. Goods and services used for exploration of petroleum drills on the open sea;
  11. Deliveries of goods to the free zone, free and customs warehouses and deliveries of goods within a free zone, free and customs warehouses;
  12. Delivery of goods or services when it is envisaged by international treaties or contract of donation that tax expenses shall not be paid from the received funds.
• The following services (that are in public interest) are exempt from the VAT payment in Montenegro:
  1. Public postal services, as well as supply of goods directly related with these;
  2. Health services and care and delivery of goods including supply of human organs, blood and human milk, performed in accordance with the relevant legislation;
  3. Social security services performed in accordance with the relevant legislation;
  4. Services in education performed in accordance with the relevant legislation;
  5. Services related to culture, as defined in the relevant legislation;
  6. Services related to sport and sport education, which perform nonprofit organizations (unions, associations, etc);
  7. Services of public radio broadcasting service, except for services of commercial character;
  8. Religious services and supply of goods directly linked to religious services performed by religious institutions, in accordance with the regulations related to those communities;
  9. Services provided by non - government organizations established in accordance with the regulations governing the activities of these organizations, unless there is probability that such exemption would lead to a distortion of competition.
  10. Insurance and reinsurance services, including services provided by insurance brokers and agents;
  11. Supply of immovable propriety, except the first transfer of the ownership rights that is the rights to dispose of newly-constructed immovable property;
  12. Services of leasing or subletting of residential houses, apartments and permanent residential premises for longer than 60 days and lease of agricultural land or forests, which are registered in land books;
  13. Banking and financial services, such as: credits, guarantees, deposits, savings, bank accounts, payment transactions, transfers, executing due liabilities, cashing cheques or other financial instruments, except for recovery of debts and factoring; transactions, including the issuing of bank notes and coins, which are legal tender in any country, excluding collector items (numismatic collection); bank notes not in use as legal tender, and coins with a numismatic value; trading in shares that is other forms of equity interests in companies, bonds and other securities, including their issuance, except for the safekeeping of securities; and investment fund management.
  14. Current postage stamps, administrative and court and tax stamps;
  15. Supply of gold and other precious metals to the Central Bank of Montenegro;
  16. Services of games of chance and entertaining games.

Property Transfer Tax in Montenegro

• Transfer tax in Montenegro is payable on transfer of ownership of real property and land.
• The tax of 3% is imposed on the buyer.

Inheritance Tax in Montenegro

• The tax rate of inheritance tax is 3% on inheritance of real estate.
• There is an exemption when the recipient is a close relative.