Montenegro is preparing significant changes to its VAT framework that could substantially reshape the country’s fast-growing short-term rental and online commerce sectors, marking another step in the alignment of domestic tax regulation with evolving European digital economy standards.
Proposed amendments to Montenegro’s VAT legislation introduce stricter rules for apartment rentals, digital platforms and e-commerce operators, with authorities aiming to reduce the gray economy, improve tax collection efficiency and increase oversight of rapidly expanding online transactions. (me.ekapija.com)
One of the most important changes affects the short-term accommodation market, particularly apartment rentals advertised through digital platforms such as Airbnb and Booking-type services. Under the proposed framework, platform-linked accommodation activities could face tighter VAT registration obligations and expanded reporting requirements, especially for operators exceeding the current EUR 30,000 annual turnover threshold for mandatory VAT registration in Montenegro.
The reforms arrive as Montenegro’s tourism-driven property market continues to expand rapidly, particularly along the Adriatic coast where private apartment rentals have become one of the dominant forms of accommodation capacity during the summer season. Authorities increasingly view the sector as underreported from a tax perspective, particularly where online platforms intermediate payments and reservations.
The proposed changes also target the broader e-commerce sector through updated VAT treatment for cross-border online sales and digital transactions. Montenegro is attempting to modernize its VAT administration in line with wider European trends focused on platform accountability, digital reporting and electronic invoicing systems. Similar reforms are unfolding across the EU under the broader “VAT in the Digital Age” framework designed to strengthen taxation of platform-based economic activity.
For small landlords and online sellers, the changes may significantly alter operating economics. Businesses and individuals previously functioning below formal reporting visibility could face stricter compliance obligations, mandatory bookkeeping procedures and higher administrative costs associated with VAT registration and reporting.
At the same time, the reforms may improve transparency and regulatory consistency within Montenegro’s tourism and digital commerce sectors — an increasingly important issue as the country advances EU accession negotiations and attempts to strengthen fiscal governance standards. International institutions and investors have repeatedly emphasized the importance of reducing the informal economy and increasing digital tax compliance across the Western Balkans.
From a market perspective, the new VAT rules could also accelerate further professionalization of Montenegro’s private accommodation sector. Larger operators with structured accounting systems may benefit from a more regulated environment, while smaller informal landlords could face pressure to either formalize operations or exit parts of the market.
The reforms additionally reflect broader structural changes in Montenegro’s economy, where tourism, real estate and digital platform activity now occupy an increasingly important share of GDP and fiscal revenues. As seasonal tourism volumes continue to grow and foreign property ownership expands along the coast, tax authorities are under mounting pressure to improve monitoring of short-term rental income flows and online commercial transactions.
The proposed amendments come alongside wider tax and corporate governance reforms currently underway in Montenegro, including stricter corporate registry enforcement, increased financial reporting obligations and broader alignment with European fiscal and compliance standards.
