Montenegro: Measures requiring e-filing of VAT returns, changes to items subject to “reduced VAT rate”

Montenegro: Measures requiring e-filing of VAT returns

Value added tax (VAT) legislative amendments were published in the official gazette of Montenegro in August 2020.

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Among the changes addressed in the new VAT amendments are measures requiring electronic filing (e-filing) of VAT returns. There are also measures that allow for the issuance of an electronic VAT invoice, provided that prior consent of the invoice recipient is obtained and the invoice complies with law governing electronic documents.

Other changes address the application of the “reduced VAT rate” of 7% (instead of the regular 21% rate of VAT) to following supplies:

  • Accommodations in tourist apartments
  • Preparation and service of food, bottled water, and non-alcoholic non-carbonated beverages in restaurants and facilities providing catering services (applicable as of 1 September 2021)
  • Preparation and service of food and beverages, except alcoholic beverages, carbonated beverages with added sugar and coffee, in facilities used for hospitality services (applicable up to 31 August 2021)

The measures also repeal the reduced VAT rate on food and beverages in hotels having a minimum four-star rating (Northern region) and minimum five-star rating (Mid region and coastal region).

Amendments regarding the application of the zero VAT rate (that is, an exemption with the right to deduct input VAT) extend this treatment to the import and supplies of:

  • Products and services based on a donation contract with state bodies, local municipalities, and other public legal bodies
  • Donations of medical devices and protective equipment to state bodies and organizations, local municipalities, and other public legal bodies to address the situation of epidemics of infectious diseases


Read an October 2020 report prepared by the KPMG member firm in Montenegro

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