Electronic Fiscalization and E-invoicing in Montenegro

Although Montenegro is currently not in the European Union, through their tax system, they have aligned with EU legislation in order to ease the exchange of international transactions.

Since 2021, Montenegro has implemented real-time fiscalization and e-invoicing as essential pillars of its tax administration system. This article aims to explore the key aspects of fiscalization and e-invoicing in Montenegro, shedding light on their implications and the requirements for taxpayers.

Latest news

In January 2023, at a meeting between the Montenegrin Ministry of Finance and the Ministry of Finance of Serbia, Serbia agreed to assist Montenegro in the development of an electronic invoice system.

In April 2023, the Serbian government announced that Asseco SEE will be providing the Montenegrin taxpayers with a free license for 3 years to a centralized platform for the transmission of electronic invoices.

Since then, the Ministry of Finance is working on forming a group of representatives to develop a plan for e-invoicing.

Implementation timeline

• 1 January 2021 - Start of the transition from a hardware to a software-based fiscalization system.

• 1 June 2021 - End of hardware-based fiscalization system and mandated real-time software fiscalization.

• 2023 - Formation of a plan for e-invoicing by the Ministarstvo Finansija.

• 2025 - 2026 - Predicted B2G and B2B e-invoicing implementation.

Fiscalization

Fiscalization has been implemented in Montenegro since 2001 with the implementation of a hardware-based fiscalization system. This was enforced through the use of cash registers.

In June 2021, a new fiscalization system in Montenegro was adopted, a real-time software-based fiscalization system. Through the enforcement of the Law on Fiscalization in the Turnover of Goods and Services, taxpayers had to use electronic cash registers (ENUs) in order to comply with legislation and minimize the grey economy.

Montenegro's software-based fiscalization is categorized as an online model that Croatia, Slovenia and the Czech Republic also use. Through this method, the Tax Authority automatically receives invoice data in real-time directly to their platform.

Cash Register

The cash register or poreske registar kase was the original method of fiscalization in Montenegro.

A unique identification number, known as the record number, is entered into the fiscal memory of a cash register, serving the purpose of identifying tax cash registers. When a fiscal receipt is printed, it is generated in duplicate copies, with one copy issued to the buyer and the other retained on the control bar. At the end of each day, it is mandatory for the cash register to print a daily report for all sales items.

In the event of a malfunctioning cash register or a power outage, the taxpayer is obligated to proceed with sales using designated accounts (known as paragon blocks) that have been previously authorized by the Tax Authority.

Electronic Cash Register (ENU)

The ENU is a hardware device equipped with software that facilitates the generation and transmission of fiscal information to the Tax Authorities through the fiscal service. It offers the advantage of fewer errors, faster transaction processing times and automates the fiscal information transmission process.

Similar to the cash register, ENUs also have the flaw of when there is a lack of electricity, payments can not be processed.

An ENU can be registered with the Tax Administration by filling out an application which will generate a Taxpayer Identification Code (IKOF). This code can then be used to access the EFI web portal(SEP) which then creates a permanent internet connection between the ENU, SEP and the Montenegrin Tax Administration server.

Electronic invoicing in Montenegro

E-invoicing is currently voluntary for all transaction types. In regards to B2B e-invoices, businesses wanting to issue them must consult with the Ministarstvo Finansija first. Businesses also must download and save a unique identification code of the account (JIKR) which is also printed on the invoice.

These invoices can be authenticated through the use of a digital signature or via an Electronic Data Interchange (EDI). The mandatory electronic signature does not need to be validated by the buyer after receiving the electronic invoice.

The e-invoices need to be stored for only 5 years, almost half of what other European countries are requiring.

Benefits of e-invoicing and online fiscalization

There are many benefits of e-invoicing which entities can capitalize on:

• Automation - This can aid in reducing human error, speeding up the process and allowing employees to focus on fewer routine tasks.

• Cost savings - E-invoicing can help save over 60% of the time and money spent on paper invoices.

• Compliance - Through utilizing a service provider such as DDD Invoices, companies do not have to create their own e-invoicing system and do not have to deal with the bureaucracy that comes with both of these processes.

How DDD Invoices can help your business

The DDD Solution simplifies e-invoicing by providing an e-invoicing solution that integrates into your existing software. This allows companies to automate the invoicing process and eliminate the need for manual data entry.

We stay up to date with local tax regulations so you don’t have to. Comply with B2G e-invoicing requirements with ease through a single API. If we do not currently serve a territory where you require e-reporting, let us know, and we can develop it in 2-3 weeks. This way, we can ensure your VAT compliance with tax obligations at all times, wherever you do business.

FAQs about fiscal law in Montenegro