As of January 2021, Montenegro is replacing its 19 year old electronic fiscal system based on fiscal memory modules with a new one, which means that the Montenegrin consumers will be able to validate and report their invoices to the Tax Authority. More precisely, the customers will be able to check whether the VAT  included in the price they had to pay was really declared to the tax authority, or if the taxpayer decided to illegally keep it. In doing so, Montenegro is joining a club of countries that already do invoice verification; Slovakia, Czech Republic, Croatia, Rwanda, Slovenia, Fiji, Samoa, Austria, Russia, Bulgaria, and North Macedonia. Many countries are expected to implement similar system very soon in attempt to improve customer’s confidence in effectiveness of the tax collection system.

The newly adopted fiscalization model is based on the digital signature of the invoice. There are two digital signatures on the invoice, one created by the taxpayer POS and the other signed by the Tax Authority server.  The second signature confirms that the Tax Authority has certified the issued invoice. In the case of the internet interruption at the time of issuing the invoice, only the first signature is printed.

For easier verification, QR code will be printed on the invoice that a customer can scan using the special application developed by the local Tax Authority on their smartphone. As the local Tax Authority explains, every customer will become a compliance officer that will indirectly help tax inspectors do their jobs in the fight against the grey economy.

The Public Response

Montenegro still doesn’t know how the public will respond to the new system, but the authorities have high hopes. They are lead to believe this by the past example from the “Budi odgovoran” campaign, which roughly translates to “Be Responsible.”

The Montenegrin Tax Authority says that the citizens are already used to reporting legal offenses. In the “Be Responsible” campaign, the authorities received over 18.492 reports from the citizens. Some of them were regarding ecology, and others were reports on violation of consumers’ rights (over 9.000).

The country already elected a bunch of laws regarding the fiscalization process. The rule book on the content of the application for the fiscal service operator’s code, the manner of generating the identification code of the taxpayer, and the manner of submitting data and generating the code on the business premises of the taxpayer, the content and manner of verifying the invoice book, has been implemented.

Additionally, the rules on what happens in case of Internet connection failure and how will the invoices be delivered to the Tax Authority have already been decided upon.

Most importantly, the new system will allow for real-time turnover audit from the business to the Tax Authority’s system. The whole point is to modernize the way taxpayers communicate with the Tax Authority, and most importantly, following whether taxpayers and realtors abide by the tax collection laws. This will naturally have a positive impact on the economy of the country and the authorities are expecting a higher public revenue income.

Taxpayers will have to upgrade their existing POS and cash registers or buy new ones that will comply with the new regulations. However, the vendors are expressing great concern with the delay of the Authorities to publish the technical specifications and not having a test environment to prepare their upgrades in time.

The fines have already been decided upon as well – realtors that do not issue fiscal receipts risk being fined anywhere from 8.000 to 40.000 Euros. The Tax Authority says they will soon announce the amount for penalties regarding other misdemeanours.

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