Previous years in Montenegro were years of intensive real estate market development. In line with strong development of Montenegro as tourism and business destination, numerous of real estate projects were undertaken.
Such strong development brought to Montenegro large number of international businesses that are today in a position to acquire office premises. Thus, VAT treatment of purchase of office premises issue has became extremely interesting issue.
In a situation when an immovable property is the subject of purchase and is a newly constructed property, which the ownership is transferred for the first time, VAT should be charged and presented on the invoices.
In general Montenegrin Law on VAT defines that tax payer is able to include in its monthly VAT calculation all VAT related expenses on local purchase of goods and services as well as import of goods and services.
In line with this, in cases of acquisition of office premises that will be used for business activity of the company, related VAT expenses should be included in monthly VAT calculation and these will not be considered as company expense but will have the treatment of rechargeable VAT.
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