The Government has today enacted the Draft Law on Tax for the Transport of Motor Vehicles, Vessels, Aircraft, and Spacecraft. This initiative aims to encourage taxpayers in Montenegro to fulfill their tax obligations under more favorable conditions.

The proposal includes a reduced sales tax rate of 2.5 percent on used motor vehicles, boats, and aircraft for a period of 90 days following the law’s enactment.

“In alignment with the fiscal strategy for 2024-2027, the proposed legislation is intended to incentivize taxpayers to meet their tax obligations more favorably,” announced government officials.

The government anticipates that these measures will enhance the efficiency of income tax collection from sales of motor vehicles and related assets, urging all relevant authorities to submit documentation proving ownership transfer of motor vehicles.

“To foster a fairer taxation system, we aim to broaden the exemption scope from sales taxes for certain individuals and entities, including state administration bodies,” stated government representatives.

Additionally, three bylaws will be proposed to clarify tax liability determination and the necessary documentation required by taxpayers for the Tax Administration.

Penalties of up to 11 thousand euros are outlined for non-compliance with this law.

The government has previously identified issues in the acquisition practices of motor vehicles, citing the tendency to evade sales tax on used vehicles, vessels, and aircraft.