Montenegro: Montenegro hikes VAT rate and amends excise duties

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Montenegro: Montenegro hikes VAT rate and amends excise duties

intl-updates-small.jpg

Montenegro has recently sharpened its focus on fiscal consolidation with a target to achieve budget surplus and to establish a declining trend in the level of public debt from 2019. On the revenue side, additional measures will be aimed at further harmonising the excise policy with the EU's rules. Additionally, the government is set to increase the standard VAT rate by two percentage points as of 2018, an adjustment which will not disturb the Montenegrin tax system.

The fiscal strategy has a redefined social policy, and the protection of certain categories (particularly pensioners) was taken into account. The effects of fiscal consolidation measures are expected to be reflected in the macro-fiscal indicators in such a way that it is predicted that the budget deficit will continue to decline and enter the surplus zone by 4.5% of GDP from 2020. Changes and amendments to the Excise Act envisage changes for products that do not directly affect the standard of living of citizens, such as tobacco products, ethyl alcohol and carbonated water with added sugar.

For these three types of products, an excise calendar has been established by law, according to which excise taxes will be increased once a year until 2020. Montenegro plans to introduce two new excise products – non-combustible tobacco and liquids for charging electric cigarettes. With the amendments to the law on excise taxes, a new excise product is also included: coal, to which excise duty will be applicable from January 1 2019.

The basic amendments and supplements to the VAT Law refer to the increase of the standard rate from 19% to 21%, effective as of January 1 2018. The aim of these changes is to reduce the public debt to a level of 67% by 2020.

The increased rate is expected to contribute to the increase of budget revenues. Amendments have only dealt with the standard rate, while the reduced one has remained unchanged.

zivkovic.jpg

 

Jelena Zivkovic

Jelena Zivkovic (jelena.zivkovic@eurofast.eu)

Eurofast

Tel: +382 20 228 490

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

Tax teams that centralise and automate their pillar two data will have a much easier time during reporting season, says Hank Moonen, CEO of TaxModel
While GCCs drive efficiency for multinationals, they also present a host of TP risks that should be considered carefully
PwC Ireland has also called for simplifying Ireland’s tax code and a reduction in its capital gains tax in a pre-budget submission
Effective audit management requires more than documentation; it’s the way taxpayers engage that can shape audit direction, manage procedural ambiguity, and preserve options for appeal or litigation
American advisers are falling short of client expectations when it comes to providing value-added services, but remaining tight-lipped won’t make the problem go away
Awards
The Social Impact Awards unveil new categories to reflect a changing legal and social landscape
Australia's approach to tax policy has undergone significant shifts in recent years, reflecting global trends and unique domestic considerations. These developments merit close attention from tax professionals
The UK has temporarily dodged the 50% rate due to a trade deal signed with the US in May; in other news, Ryan acquired a Northern Irish tax firm
Following a $28 million funding round, Aibidia wants to ‘double down’ on the US market via partnerships with the ‘big four’, the Finnish TP tech provider’s CEO tells ITR
The Luxembourg-based TP leader tells ITR about relishing the intellectual challenge of his practice, his admiration for Stephen Hawking, and what makes tax cool
Gift this article