What is being negotiated?
Tax revenues represent a key source of financing for the state budget and enable the implementation of strategic economic and social objectives. Within the European Union, there is no obligation for full harmonisation of all types of taxation. The alignment of Member States’ tax systems is carried out through coordination, with the aim of preventing measures that could distort the functioning of the single market. Each Member State retains the right to maintain its own tax system and introduce new forms of taxation, subject to the obligation to align certain elements with European legislation. Decisions on taxation matters are adopted unanimously, thereby safeguarding the national autonomy of the Member States.
When was the chapter opened?
Chapter 16 – Taxation was officially opened on 30 March 2015 at the Intergovernmental Conference in Brussels.
Closing benchmarks
For Chapter 16, the European Commission defined three closing benchmarks:
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Montenegro adopts legislation in areas requiring further alignment, particularly in the fields of VAT, excise duties, and direct taxation. It also submits to the Commission a detailed plan for achieving full alignment with the EU acquis by the date of accession.
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Montenegro has adequate administrative capacity and the necessary infrastructure in central and local tax offices to implement and enforce tax legislation, ensure effective tax collection, and monitor taxpayers. In addition, the Central Liaison Office and the Central Excise Liaison Office must be sufficiently staffed and fully operational upon accession.
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Montenegro demonstrates satisfactory progress in the development of all IT systems of the tax administration, including interconnection systems, particularly those for VAT (VIES), excise duties (EMCS), and IT systems for tax cooperation and exchange of information in the field of direct taxation.
Sub-areas
Chapter 16 – Taxation is divided into four sub-areas:
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Indirect taxation
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Direct taxation
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Administrative cooperation and mutual assistance
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Operational capacity and computerisation
What are the activities in the upcoming period?
In the forthcoming period, Montenegro will focus on fulfilling its obligations under Chapter 16 through the adoption and improvement of legislation in the areas of indirect and direct taxation. This includes amendments to the Law on Value Added Tax, the Law on Excise Duties, and the Law on Corporate Income Tax, with the aim of achieving full alignment with the EU acquis.