121. rulebook on implementation of the law on value added tax

<strong>121.</strong> RULEBOOK ON IMPLEMENTATION OF THE LAW ON VALUE ADDED TAX
(3) Where the transferee referred to in paragraph 1 of this Article performs partly taxable and
partly exempt supplies of goods and services, input VAT shall be divided in accordance with
Article 38 of the Law.
(4) Where the transfer of a property referred to in paragraph 1 of this Article is carried out by a
person exempt from VAT, or by a person referred to in Article 42 of the Law, VAT shall not be
charged and, consequently, the transferee may not exercise the right to deduction.
(5) Where, upon the transfer of a property referred to in paragraph 1, changes occur in the
conditions, which were decisive for the deduction of input VAT, in accordance with Article 39
paragraph 2 of the Law, the transferee shall be obliged to make a correction of the input VAT as if
VAT had been charged from him on the transfer of such property.
16. Supplies for which input VAT may not be deducted
Article 108
(1) Taxable persons may not deduct input VAT included in the invoices for received goods and
services used for supply of goods and services:
1. on which VAT exemption is prescribed in the country;
2. outside Montenegro, under the condition that the right to deduct input VAT would not
have been recognized if the activity had been performed in Montenegro;
3. without consideration, which would be exempt from VAT.
(2) Where the goods and services on which VAT exemption is prescribed in the country are
supplied outside Montenegro, the right to deduction of related input VAT shall not be exercised.
(3) Where the taxable person supplies goods and services without consideration, he shall not be
entitled to deduct input VAT if those supplies are exempt from VAT.
(4) In respect of the exports referred to in Article 25 of the Law, the taxable person shall have the
right to deduction of input VAT shown on the invoices for received goods and services relating to
exporting transactions.
XII
VAT REFUND
Refund of VAT based on tax return
Article 109
(1) If the amount of the tax liability (output tax) in a tax period is lower than the amount of the input
VAT which the taxpayer may deduct in the same period, the difference in VAT shall be accepted
as a credit for the following tax period and may be refunded at the taxpayer’s request within 60
after the submission of the VAT return.
(2) Taxpayers who mainly export goods, and taxpayers who declare a surplus of input VAT in
three or more successive VAT returns, may be refunded the difference in VAT within 30 days after
the submission of the VAT return.
(3) The taxable person who mainly exports goods and services referred to in paragraph 2 of this
Article shall be deemed a taxable person whose revenues generated abroad exceed 51% of his
total income.
Rulebook on Implementation of the Value Added Tax Law
37