Montenegro: Montenegro hikes VAT rate and amends excise duties

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

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

India also signed its first-ever bilateral APAs with France, Ireland, Indonesia and Sweden last year, the CBDT revealed
Chile’s revamped GAAR marks a shift toward structural scrutiny, pushing MNEs to strengthen tax governance, economic substance and compliance strategies
New reforms represent the most seismic shift in Canadian TP legislation since its enactment and a clear inflection point for MNEs, ITR has heard
Spain did not transpose EU VAT rules for SMEs or works of art; in other news, an increased VAT threshold came into force in South Africa
While the IBS incorporates taxable events previously covered by state and municipal taxes, its governance and operational logic represent a significant departure from the legacy model
The new office on the fourth floor of 4 More London will span 14,230 square feet, with the potential to expand to the first and second floors
MNEs now face a shift from modelling to execution as the side‑by‑side deal forces tax teams to upgrade systems, harmonise data, and prevent costly pillar two mismatches
As recent surveys suggest a disconnect between AI adoption and employee engagement, the big four risk digging themselves into a strategic hole
Almost three-quarters of surveyed tax professionals are concerned about inaccurate AI outputs; in other news, Dentons hired a partner from CMS to lead its Belgian tax team
Long-running, high-value and complex enquiries are a significant reason for HM Revenue and Customs’s increased TP yield, experts suggest
Gift this article