Navigating the complex tax regulations around yacht ownership can be challenging. However, Montenegro offers one of the most favorable tax environments in Europe for yacht owners. This post provides a clear guide to the tax rules for yachts in Montenegro.
1. Value Added Tax (VAT) on Chartering
One of the main reasons why Montenegro is a preferred destination for yachts is the low VAT on chartering. As of the date of publication, the VAT for yacht charters in Montenegro is 7% – significantly lower compared to other European countries. This reduced rate applies to the charter fee only.
2. VAT on Fuel and Supplies
In addition to the favorable VAT on chartering, there is no VAT on fuel, including for private yachts and charter yachts, as well as duty-free goods and provisions. This makes it quite cost-effective for yachts to refuel and resupply in Montenegro.
3. Customs Territory
Another key benefit is that Montenegro is not part of the EU’s customs territory. Consequently, non-EU flagged yachts can stay in Montenegro waters indefinitely, outside the 18-month restriction that applies within EU waters under Temporary Admission (TA) for non-EU registered vessels. This is a significant advantage for long-term cruising or wintering in Montenegro.
4. Importation and Registration Taxes
Importation of yachts into Montenegro from non-EU countries is relatively straightforward. Montenegro applies a standard import duty of 1.7% on the customs value of the yacht. There is also a VAT of 21% on the customs value of the yacht plus the import duty.
However, these charges can be avoided if the yacht is temporarily imported under the yacht-in-transit regime, where the yacht must leave Montenegro (and the customs territory of the Western Balkans) within 24 months.
5. No Property Tax on Yachts
Unlike some other countries, Montenegro does not impose an annual property tax on yachts. This can lead to substantial savings for yacht owners over time.
In conclusion, Montenegro’s favorable tax environment makes it a highly attractive destination for yacht owners. However, it is always important to seek expert advice when navigating tax regulations. This blog post is meant to provide general guidance and may not account for changes in tax laws or individual circumstances.
Note: Always consult with a tax advisor or legal professional to get the most recent and relevant advice.