The Ministry of Finance of Montenegro has adopted a regulation that exempts yacht and other vessel owners from paying fuel excise taxes again, explaining this move as an incentive to promote the development of nautical tourism.
The excise tax on fuel currently ranges from 33 to 44 cents per liter, and it is included in the VAT base. As a result, owners of luxury vessels will once again pay significantly lower fuel costs compared to the general public.
Vessel owners were previously exempt from excise taxes until June 2022 when excise taxes were introduced on their fuel, following a proposal from then-Finance Minister Aleksandar Damjanović. At that time, the Ministry calculated that the state budget had lost around 59 million euros from 2018 to July 2022 due to unpaid excise taxes and VAT on fuel sales for yachts and boats, according to Vijesti.
The regulation has been published on the government website and will take effect upon publication in the Official Gazette. The Ministry did not specify how much this measure would reduce budget revenue.
Starting in January, a new fee of three cents per liter of fuel will be introduced for citizens and businesses, which is intended for creating oil reserves. Additionally, from the new year, the “Europe Now 2” program will increase excise taxes on wine, certain sweets, and carbonated drinks, as well as raise the VAT rate on books and hotel accommodations.
The full title of the new regulation is the “Regulation on the Implementation of Customs Procedures for Goods Used to Supply Vehicles in International Traffic,” which details the supply of fuel and other excise goods, such as alcohol and tobacco, to vessels and aircraft under customs supervision before leaving Montenegro’s customs territory.
The regulation provides procedures for fueling vessels and supplying other excise goods directly from excise warehouses in ports and marinas without paying excise duties.
Regarding the supply of fuel and lubricants to vessels, the regulation sets out how vessels can be supplied with these goods before leaving territorial waters, after which they must submit documentation for free circulation, such as a manifest or crew list. A key change compared to previous regulations is that vessels used for private purposes can now be supplied with fuel and lubricants under customs supervision and without paying import duties before leaving territorial waters. These private vessels are those used by their owners or rented for recreation, as well as for transporting passengers and goods without compensation.
The Ministry of Finance clarified that the exemption can be granted on the condition that private vessels remain in Montenegro’s territorial waters for at least 72 hours, counting from the day after their entry into Montenegro. After refueling, vessels must leave Montenegro’s territorial waters but may return later.
This regulation is in line with the government’s policy aimed at boosting nautical tourism by attracting more yachts, ships, and high-spending tourists. According to the Ministry, this solution will remain in effect until Montenegro joins the European Union, in accordance with Article 218 of the Customs Law.
When Damjanović introduced the excise tax on fuel for these vessels in June 2022, it was announced that the budget had lost 59 million euros over four years (from 2018 to 2022) due to uncollected excise taxes and VAT on fuel sales for yachts and boats, regardless of whether they were used for commercial purposes or recreation.
Of this total amount, approximately 40 million euros was attributed to recreational yachts alone. During this period, 103.9 million liters of fuel for yachts, boats, and other vessels in ports and marinas were sold without excise taxes, with uncollected excise duties totaling 40.97 million euros and VAT at 18.6 million euros.
At the time, the Ministry of Finance cited the need for solidarity with citizens and businesses who pay full tax amounts as the reason for introducing the excise tax.
