Montenegro’s Tax Administration imposed €1.78 million in penalties following intensified inspections of businesses operating during the tourism season. Between 1 May and 30 July, tax inspectors conducted 2,096 controls across the country. Irregularities were identified among 343 taxpayers, resulting in 512 penalty notices with a total value of €1,781,750. Authorities also issued temporary operating bans for 34 businesses as part of the enforcement measures.
Inspections Focus on Tourism-Related Activities
The controls targeted sectors with the highest concentration of summer economic activity, including hospitality, accommodation, retail and other tourism-related services operating mainly in coastal centres. Inspectors focused on compliance with obligations related to fiscal receipts, revenue reporting and undeclared employment.
The results highlight continued enforcement efforts in Montenegro’s tourism economy, which includes large hotels and professionally managed companies, alongside a significant number of smaller businesses such as restaurants, bars, shops, apartment operators and seasonal service providers.
Compliance Differences Affect Market Competition
Businesses operating in line with tax and labour regulations face different cost conditions compared with operators that fail to report cash income or employ workers without registration. Companies that record all revenue, pay employment contributions and comply with labour requirements may face higher operating expenses than competitors operating outside formal rules. Increased enforcement can improve market conditions for compliant businesses while also supporting public revenue collection during the period of highest economic activity.
Seasonal Closures Create Additional Pressure
The number of identified violations compared with the total number of inspections shows that irregularities were detected in a significant minority of cases, while most inspected taxpayers were not reported as non-compliant. Temporary closures can have a significant financial impact during the peak tourism period. Losing several operating days in July or August can create costs exceeding the value of a formal penalty, while public closure notices can affect business reputation.
At the same time, seasonal businesses often face administrative challenges related to frequent staff changes, foreign-worker documentation and reporting requirements, creating a need to distinguish between deliberate tax violations and smaller administrative mistakes.
Digital Compliance and Private Accommodation Monitoring
Alongside inspections, digital tools, clearer guidance and consistent application of regulations remain important elements of improving compliance, particularly for smaller seasonal operators. The inspection results also highlight the role of private accommodation in Montenegro’s tourism economy. Official tourism statistics do not capture all activity generated through individually rented apartments and houses, although this segment represents an important area for tax administration and tourism planning.
Economic activity outside official reporting channels affects public revenue collection, the measurement of tourism performance, infrastructure planning and the reliability of information available to investors and municipalities. The €1.78 million in penalties from seasonal inspections represents the outcome of intensified tax controls during the tourism period, with enforcement focused on increasing compliance across businesses operating in the sector.
