Montenegro has introduced VAT relief in response to the COVID-19 pandemic through an amendment law to the VAT Law, which was published in the Official Gazette and entered into force on 4 August 2020.
The amendment law includes the extension of the reduced 7% VAT rate for accommodation to cover "tourist apartments" with effect from 4 August 2020. The scope of the 7% VAT rate is also amended to include the preparation and serving of food and beverages, other than alcoholic beverages, carbonated drinks with added sugar, and coffee, in catering establishments with effect from 4 August 2020 to 31 August 2021. From 1 September the reduced 7% VAT rate will continue to apply, but with an adjusted provision that includes the preparation and serving of food, bottled drinking water, and non-alcoholic non-carbonated beverages in restaurants and facilities where catering services are provided.
In addition to the amendments to the scope of the reduced 7% VAT rate, amendments are also made to the scope of zero-rated supplies. This includes that the zero-rate applies for the supply of products and services on the basis of a concluded donation contract with state bodies, local self-government units, and other public legal bodies, and for the supply of donations in the form of medical devices and protective equipment to combat the consequences caused by epidemics of infectious diseases.
Lastly, it is provided that VAT returns must be submitted electronically, which applies after three months from the date of the amendment law's entry into force (i.e., after 4 November 2020). Until the electronic submission is mandatory, returns may be submitted in paper or electronic form.
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