Montenegro reduced VAT on installing solar panels to 7%
The Parliament of Montenegro adopted amendments to the Law on Value Added Tax and the Law on Planning and Construction, which reduced the VAT on solar panels to seven percent, and simplified their installation.
Montenegro previously announced that the VAT on solar panels would be abolished, but now it has been reduced from 21 to seven percent, on sales, installation, and import.
Milutin Đukanović, the president of the Board of Directors of Elektroprivreda Montenegro, said that the amendments to the law introduced two novelties: there are no urban planning and technical conditions for solar power plants of up to 1,000 kW, while the VAT on solar equipment was reduced from 21 to seven percent.
This significantly simplifies the procedure of building solar power plants and reduces their price by about 12 percent, said Đukanović.
EPCG is very interested in making the installation of solar panels as easy and cheap as possible because it is the main installer of these plants in Montenegro. The company recently announced a public call for the continuation of the Solari project.
The proponent of the changes to the VAT Law was the Democratic Front, which brought together the parties New Serb Democracy, Democratic People’s Party, and the Workers’ Party. They demanded that the tax be reduced to zero in order to make it easier for citizens and the economy to install solar systems in the time of the energy crisis and the enormous increase in electricity prices on the European market.
The Government of Montenegro did not support the legal changes
But the Government of Montenegro, and above all the Ministry of Finance, did not support the reduction of this VAT to zero with the explanation that the European directives prescribe the possibility of a lower rate, but not its abolition, as well as that the budget revenues in 2023 must be taken into account.
The proponents of VAT abolition then decided to change the proposal and reduce the tax from 21 to seven percent.
The government did not even support the amendments to the Law on Planning and Construction because it believed that this way would not simplify and facilitate the construction of solar power plants.
