Regulatory updates - Montenegro

On 26 September 2024, the parliament of Montenegro signed the introduction of a reduced VAT rate of 15% into law. This entails some products and services to be taxed at 15% instead of 7% VAT. The changes are expected to come into force from 1 January 2025.

Products and services taxed at the new VAT rate of 15% include:

• Books;
• Hotels and accommodation services;
• Non-alcoholic drinks and beverages;
• Services for preparation and serving of food;
• Copyrights and services relating to education, science, and art;
• Services billed through tickets;
• Services provided in marinas;
• Solar panels;
• Hairdressing services.

The 7% VAT rate will apply to:

• Basic products for human consumption;
• Medicines;
• Orthotic and prosthetic devices as well as medical devices that are surgically implanted in the body;
• Textbooks and teaching aids;
• Daily and periodical press without advertising content;
• Non-bottled drinking water;
• Public transportation services;
• Animal feed, live animals, plant nutrition, means of protection of plants, seed and planting material;
• Menstrual products and diapers for babies.

The changes, which come into force on 1 January 2025, are driven by a broader fiscal strategy for the country, aiming to align the tax system with EU Directive 2006/112 to support Montenegro’s application to enter the union, while enabling the country to lower the tax burden on wages.

The MoF of Montenegro signed an agreement with the MoF of Serbia to receive a license to use a centralized platform for sending, receiving, managing, and storing e-invoices of companies and entrepreneurs in Montenegro.

Stay tuned with Pagero to receive the latest news on e-invoicing in Montenegro.