VAT and invoicing in Montenegro (2026): PDV and fiscalization

Montenegro's VAT has followed the EU model for years, and 2025 and 2026 brought it closer still: a new 15% rate, EU-style place-of-supply rules and VAT numbers with the ME prefix. What sets the country apart is fiscalization: since 2021 every invoice, whether paid in cash or by bank transfer, is reported to the Tax Administration in real time. This guide covers rates, registration, returns, invoice content and fiscalization, with a worked example in euros. Rules are as of October 2026.

PDV at a glance: rates and the tax authority

The tax is porez na dodatu vrijednost (PDV), governed by the VAT Law (Zakon o porezu na dodatu vrijednost) and administered by the Tax Administration (Poreska uprava).

Restaurant food was taxed at 7% from 2022 until it moved to 15% on 1 January 2025, so old price lists and menus are a common source of errors. The same 2025 changes removed the 0% rate that had applied to building and equipping certain large investments, such as five-star hotels.

Who must register for VAT

• Threshold: registration is mandatory when your turnover in the last 12 months, or a shorter period, exceeds EUR 30,000. You apply by the 20th of the month after the month you crossed it; the Tax Administration decides within seven days and registers you itself if you do not apply.
• Below the threshold you may not show VAT on your invoices, and you cannot deduct input VAT.
• Voluntary registration: you can register below the threshold on written request, but you stay registered for at least three years.
• Foreign businesses cannot use the small-business exemption. A non-resident appoints a tax representative; if it does not, the Montenegrin customer pays the VAT. Since February 2026, foreign providers of consumer services taxed in Montenegro must set up a permanent establishment or appoint a representative.
• VAT number: since the amendments of February 2026, your VAT registration number is your tax identification number (PIB) with the prefix ME; the Tax Administration replaces existing numbers automatically.

VAT returns and payment

Fines are steep: a late return, a missing invoice or late registration can cost a company EUR 3,000 to 10,000, plus EUR 800 to 2,000 for the responsible person, and an entrepreneur EUR 1,000 to 4,000.

What a Montenegrin invoice must show

You issue an invoice for every supply, every advance payment received and every later change to the tax base (Articles 31 and 32 of the VAT Law). A B2B invoice shows, in particular:

1. 1Place and date of issue and the invoice serial number
2. 2Your name, address and VAT number
3. 3The customer's name and address
4. 4The date of supply
5. 5Quantity and trade name of goods, or type and quantity of services
6. 6The net amount
7. 7The VAT rate
8. 8The VAT amount
9. 9The total including VAT

Special cases:

• No VAT charged: for an exempt or zero-rated supply, state that no VAT is charged and cite the article of the law that applies.
• Reverse charge: since February 2026, invoices for services whose place of supply is outside Montenegro, and for gas, electricity, heating and cooling supplied to businesses that resell them, must carry the words “prenos poreske obaveze”.
• Consumers: an invoice to a non-taxable person may leave out the buyer's details and the net amount, but must show the price including VAT and the VAT amount.
• Corrections: for returns, discounts or non-payment you can reduce the tax base once the buyer has reduced its input VAT and told you in writing; the correction goes in the period in which the change happened. Cancellations (storno) and return invoices are fiscalized like any other invoice.
• Electronic invoices are allowed with the customer's prior consent.
• Foreign currency: amounts in another currency are converted at the Central Bank of Montenegro's middle rate on the day the VAT becomes due.
• Record keeping: at least five years after the end of the year the documents relate to, and 20 years for real estate.

Fiscalization: every invoice in real time

The Law on Fiscalization in the Trade of Products and Services (Zakon o fiskalizaciji u prometu proizvoda i usluga) has applied since 1 January 2021; old cash registers had to be replaced by 1 June 2021. It covers businesses that must issue invoices, for both cash and non-cash payments: card payments count as cash, bank transfers as non-cash.

How it works:

• Your invoicing software, or electronic fiscal device (ENU), sends each invoice to the Tax Administration's fiscal service in real time over a permanent internet connection, signed with a qualified electronic certificate.
• The invoice carries the issuer's code (IKOF), generated by your software, and the unique invoice code (JIKR) that the Tax Administration returns, plus the payment method, the due date and, for B2B and non-cash invoices, the buyer's PIB.
• Invoices are numbered in a continuous sequence per business premises and per device, starting again at 1 each calendar year.
• Each business premises is registered at least 24 hours before you start using it, and the daily cash float is reported.
• If the internet is down, invoices are sent within two days; if the fiscal service itself is down, you use an invoice book and send them within five days.
• Buyers can check an invoice with the Tax Administration for 90 days.

Failing to fiscalize can cost a company EUR 8,000 to 40,000, and a ban on trading of up to 90 days is possible.

Structured e-invoicing: not mandatory yet

There is no B2B or B2G e-invoicing mandate in force in 2026: electronic invoices are voluntary and need the customer's consent. A proposed new VAT law, put on the Government's agenda in June 2026, defines e-invoices in a structured format following the European standard, but it would apply only from the date Montenegro joins the EU. Treat it as announced, not as law.

Fiscalization requires software registered with the Tax Administration for that purpose. Clientlly does not connect to the fiscalization system, so you need a compliant fiscal solution for that part.

Worked example in euros

A small restaurant in Budva issues these invoices in September:

It buys bread and dairy products for EUR 3,000 plus EUR 210 PDV (7%) and kitchen equipment for EUR 2,000 plus EUR 420 PDV (21%). Input VAT is EUR 630.

PDV payable = EUR 2,340 − EUR 630 = EUR 1,710, filed and paid by 15 October 2026. To find the VAT inside a gross price at 21%, multiply by 21 and divide by 121: EUR 121 × 21 ÷ 121 = EUR 21.

Common mistakes

1. 1Charging the old 7% on restaurant food. It has been 15% since 1 January 2025, and coffee, alcohol and sugared drinks are at 21%.
2. 2Thinking bank-transfer invoices do not need fiscalizing. Non-cash invoices are fiscalized too.
3. 3Missing the 15th. It leaves only two weeks after month end to close the books, so book purchase invoices as they arrive.
4. 4Leaving out the reverse-charge wording on invoices for services supplied abroad, required since February 2026.
5. 5Registering voluntarily without a plan: you cannot leave for three years.
6. 6Opening a new shop or device without registering it at least 24 hours before the first invoice.

How Clientlly helps

Clientlly handles the invoicing and bookkeeping work around your monthly PDV return. Invoices are numbered sequentially per series and carry Montenegro's VAT rates; credit notes are linked to the original invoice; and the PDF is produced in your client's language, with a card payment link. You see when an invoice was opened, automatic reminders go out 3, 14 and 30 days after the due date, and recurring invoices and multiple currencies are supported. Scanned receipts have their VAT read automatically, sales and purchase VAT books are kept per rate, including exports and reverse charge, and tax reports with Excel and PDF exports are ready for you and your accountant. Import clients, suppliers, products and opening balances from Excel or CSV, and work from the mobile app. Clientlly is not a fiscalization solution, so keep a compliant fiscal system for issuing fiscalized invoices. See invoicing, accounting and how to get paid faster.