The officials of the Customs Administration will assess the value of all postal items and calculate the amount of value added tax (VAT) and customs duties, and these duties will be collected from the customer by the postman when delivering to the home address, it was stated in the answers of the Ministry of Finance to the questions of "Vijesti" about how the calculation and payment of VAT on postal items from abroad will work from January 1 of the following year.
In September, at the proposal of the Government, the Parliament adopted amendments to the VAT Law, which, among other things, introduce a full tax on all shipments and purchases from abroad instead of the current tax-free amount of up to 75 euros. The application of this new article of the law begins on January 1 of the following year.
In the Fiscal Strategy, I stated that the goal of abolishing the tax-free amount of shipments is to create a fairer taxation system and reduce tax evasion, and these changes are part of new laws aimed at compensating money in the budget due to the reduction of pension insurance contributions.
Until now, citizens could shop online and receive shipments worth up to 75 euros without paying VAT and customs on that amount. Now, depending on the goods ordered, VAT will amount to seven, 15 or 21 percent of its value. For example, VAT is seven percent on newspapers and textbooks, 15 percent on books and publications, and 21 percent on most other products.
In most countries of the region, there is a certain limit for tax-free shipments, and the highest is in Bosnia and Herzegovina, where it is 300 marks, which is 155 euros. In the EU, all shipments are taxed from 2021, and this obligation for Montenegro would exist from the day of entry into that community.
According to data from the Strategy for the Development of Postal Services, the number of such shipments last year was 800, and 270 citizens used this type of trade.
For example, on a shipment of exactly 75 euros, if it is a question of goods that are taxed at a rate of 21 percent, the VAT will now amount to 15,75 euros, and on a shipment of 10 euros, the tax will amount to 2,1 euros.
The customs officers will use the invoice that comes with the shipment for VAT calculation, but also based on the catalog and other possibilities of expertise provided by the Customs Code.
"Determination of the value of the goods (shipment) for customs purposes is carried out by the customs officer on the basis of the invoice (or other commercial document) that accompanies the goods. If the customs authority doubts the value stated in the invoice, it has the right to determine the customs value of the goods in accordance with the provisions of the Customs Act and the corresponding provisions of the by-laws. The tax rate is prescribed by the Law on Value Added Tax. Value added tax is calculated and collected in accordance with the Law on Value Added Tax, at the prescribed rate (general/reduced/zero/exemption from paying VAT) for certain types of goods", stated the Ministry of Finance when asked by "Vijesti" on which method will determine the value of the shipment.
They also said that the purchasers of postal items will not have to go to customs offices to pay taxes and duties.
"Customers pick up shipments from postal operators. The Customs Administration collects import duties from postal operators, who collect the same from the final recipients of the shipment. It is not necessary for the recipients of the parcels to come to the customs office because postal operators deliver to the recipient's home address. For additional questions regarding the delivery and payment of the recipient of the parcels, you can contact the postal operators", they said from this government department.
They also say that they do not expect that due to the changes in this law, that is, the determination of the value of all shipments and the amount of VAT, they will not have an increased volume of work.
"When reporting shipments, operators have the option of using an IT application that significantly simplifies and speeds up the procedures for reporting, controlling and releasing these shipments," the institution said.
They also said that the Ministry of Finance and the Customs Administration are preparing by-laws that will regulate a closer way of realizing the right to exemption from paying VAT, as well as the list of products that are subject to that exemption.
In the Strategy for the Development of the Postal Service until 2028, it was stated that in 2022, the citizens of Montenegro spent an average of 443 euros per year on online shopping, while the average in the EU is 1.018 euros.
The authors of the strategy, written two years ago, expected that the average annual spending on online shopping in 2027 would grow to 675,5 euros, as well as that the number of users would grow to 316.
It remains to be seen how much the introduction of VAT payment on all shipments will affect the reduction of this type of trade and the drop in the income of the companies that deal with their delivery.
Tax on all shipments that arrive after January 1, regardless of when they were ordered
The Ministry of Finance clarified that the new way of calculating VAT will be applied to all shipments that enter Montenegro in the New Year, regardless of when they were ordered.
"Shipments arriving in Montenegro after December 31, 12 will be subject to VAT at the rate prescribed by the Value Added Tax Act. Pursuant to Art. 2024 of the Customs Law, the customs debt for importation arises at the time of acceptance of the declaration, which in this case means when the shipment arrives in Montenegro. Article 55 of the Law on Value Added Tax stipulates that the obligation to calculate VAT during importation arises at the moment when the obligation to calculate customs and other import duties arises", stated the Ministry of Finance.
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