In 2026 Montenegro charges VAT at a standard rate of 21%, a reduced rate of 15% for accommodation, food and sugar-free soft drinks in restaurants, books, tickets and hairdressing, and a reduced rate of 7% for basic foods such as milk, meat and eggs, medicines, school textbooks, tap water, public transport, funeral services, nappies and menstrual products. Bread, flour and sunflower oil are zero-rated. In a price of 100 euros, VAT at 21% is 17.36 euros, at 15% 13.04 euros and at 7% 6.54 euros. Registration for VAT is mandatory once turnover over the last 12 months exceeds 30,000 euros.
This guide explains the rates, what falls under each rate, the arithmetic and VAT registration.
What are the VAT rates in Montenegro?
| Rate | Applies to | Article |
| 21% | all goods and services with no lower rate prescribed | 24 |
| 15% | accommodation, food and some drinks in hospitality, books, tickets, hairdressers and more | 24a(2) |
| 7% | basic foods, medicines, textbooks, water, public transport and more | 24a(1) |
| 0% | exports, bread, flour, sunflower oil, medicines paid by the Health Fund and more | 25 |
- The 21% standard rate has applied since 1 January 2018.
- The 15% reduced rate for accommodation applies from 1 January 2025, following the 2024 amendments.
- The exact list of goods and services at reduced rates is set by a Ministry of Finance rulebook.
What is taxed at 7%?
- basic foods: bread, flour, milk and dairy products, infant food, lard, oil, meat, eggs and sugar;
- medicines, including veterinary ones, plus orthopaedic and prosthetic aids and implanted medical devices;
- school textbooks and teaching materials;
- drinking water, except bottled water;
- daily and periodical press, except publications that are mostly advertising;
- public passenger transport and passengers' luggage;
- public hygiene services and funeral services with related products;
- animal feed, plant nutrition and protection products, seeds, seedlings and live animals;
- menstrual products and baby nappies.
Bread, flour and oil appear on the 7% list, but Article 25 sets a zero rate for bread, flour and sunflower oil, so no VAT is charged on them. Olive oil and other vegetable oils stay at 7%.
What is taxed at 15%?
- books and monographic and serial publications;
- accommodation in hospitality establishments;
- preparing and serving food, drinks and beverages in hospitality establishments, except alcoholic drinks, carbonated and still drinks with added sugar, and coffee;
- copyright and services in education, literature and the arts, works of art, collections and antiques;
- tickets for cinema, theatre, concerts, museums, fairs, amusement parks, exhibitions, zoos and sports events;
- non-profit use of sports facilities and service work in marinas;
- solar panels;
- hairdressing.
Example bill in a café and a shop
| Purchase | VAT rate |
| a loaf of bread | 0% |
| a litre of milk, eggs, meat | 7% |
| bottled water from a shop | 21% |
| lunch in a restaurant | 15% |
| sugar-free juice or mineral water in a restaurant | 15% |
| coffee, beer or a sugary fizzy drink in a café | 21% |
| a night in a hotel | 15% |
| a haircut | 15% |
| a school textbook | 7% |
| a novel from a bookshop | 15% |
| a public transport bus ticket | 7% |
| a prescription medicine paid by the Health Fund | 0% |
We compiled this table from Articles 24a and 25 of the law. That is why one café bill can carry two rates: 15% for the food and 21% for the coffee.
How much VAT is in a price?
Consumer prices in Montenegro are shown including VAT. The tax contained in a price is the price multiplied by the rate and divided by 100 plus the rate.
| Rate | Formula | VAT in a 100 € price | Price without VAT |
| 21% | price × 21 / 121 | 17.36 € | 82.64 € |
| 15% | price × 15 / 115 | 13.04 € | 86.96 € |
| 7% | price × 7 / 107 | 6.54 € | 93.46 € |
- The other way round, the price including VAT is the net price multiplied by 1.21, 1.15 or 1.07.
- Example: an item costing 50 euros without VAT costs 60.50 euros with 21% VAT.
What is exempt from VAT?
- health services, education, social insurance, public postal services and religious services;
- sales of used flats and houses, except the first transfer of a newly built property;
- renting a flat or house for permanent residence for more than 60 days;
- insurance, banking services, share trading and gambling.
Who must register for VAT?
- A person whose turnover over the last 12 months exceeds 30,000 euros, or is likely to, becomes liable for VAT.
- Anyone below that amount may not show VAT on invoices and cannot deduct input VAT.
- Voluntary registration is possible, but then for at least three years.
- The new VAT Law of July 2026 (Official Gazette 104/2026) has entered into force, but it will apply only from the day Montenegro joins the European Union; until then the rates in this guide apply.
How foreign shoppers reclaim VAT at the border is explained in our guide to tax-free shopping, and VAT on parcels from abroad in the guide to customs on parcels. How to check a fiscal receipt is covered in the guide to receipt checks, and tax for people just starting a business in the guide to the sole trader.
Frequently asked questions
What is the VAT rate in Montenegro in 2026? The standard rate is 21%, the reduced rates are 15% and 7%, and a zero rate applies to exports, bread, flour, sunflower oil and medicines paid by the Health Fund.
What is the VAT on food? Basic foods such as milk, meat, eggs, lard and sugar are taxed at 7%, bread, flour and sunflower oil at 0%, and other food in shops at 21%. Food in restaurants is taxed at 15%.
Why does coffee in a café carry 21% while lunch carries 15%? The law sets 15% for serving food and drinks in hospitality but expressly excludes alcoholic drinks, drinks with added sugar and coffee, so the standard 21% rate applies to them.
What is the VAT on accommodation? Accommodation in hospitality establishments has been taxed at 15% since 1 January 2025.
How do I calculate VAT from a price? Multiply the price by 21 and divide by 121 for the standard rate; use 15/115 for 15% and 7/107 for 7%. A price of 100 euros with 21% VAT contains 17.36 euros of tax.
At what turnover must a business register for VAT? When turnover over the last 12 months exceeds 30,000 euros or is likely to exceed that amount.
Sources
The rates and exemptions are set by the Law on Value Added Tax in its consolidated text (Articles 24, 24a, 25, 26, 27 and 42), as amended by Official Gazette 94/2024 and by the February 2026 amendments (Official Gazette 12/2026), which do not change the rates. The new VAT Law 104/2026 applies from EU accession. Information checked on 29 September 2026. Fijaka is a classifieds platform; this text is not tax advice.