Montenegro to expand oversight of online rental platforms with new VAT data requirements

Montenegro is preparing a major step toward tighter state oversight of the online accommodation market, using a new VAT framework that would give authorities access to booking-related transaction information. For investors and operators alike, the shift matters because it targets long-standing gaps in tax collection and reporting that have emerged as platform-based rentals have grown alongside the country’s tourism boom.

Draft VAT law under public consultation

The proposed legislation, currently open for public consultation, is designed to formalize and monitor Montenegro’s rapidly expanding private accommodation economy. Under the draft rules, both domestic and foreign online platforms involved in accommodation rentals would be required to maintain records of transactions and provide relevant data to state authorities.

Officials say the initiative is primarily intended to strengthen tax compliance, reduce informal activity, and increase transparency across Montenegro’s tourism-related services sector.

Closing regulatory gaps created by platform growth

Over the past decade, online booking platforms have reshaped Montenegro’s accommodation landscape. Private apartments, villas and other short-term rental units increasingly compete directly with traditional hotel capacity, particularly along the Adriatic coast where tourism-driven real estate investment accelerated.

At the same time, authorities have faced persistent challenges in monitoring occupancy levels, collecting taxes, and ensuring registration compliance within the private rental market. A significant share of short-term accommodation activity has historically operated partially or fully outside formal reporting systems, limiting visibility into tourism-related revenues and contributing to uneven competition between registered hotels and informal rental providers.

A broader European push toward platform taxation

Montenegro’s move reflects a wider trend across Europe: governments are intensifying regulatory scrutiny of short-term rental platforms amid concerns about tax collection shortfalls, informal accommodation activity, and the rapid expansion of platform-based tourism economies.

For Montenegro specifically, the stakes are high because tourism remains one of the country’s largest economic sectors—contributing substantially to GDP, employment and foreign currency inflows.

Potential effects on coastal municipalities and real estate economics

The draft VAT changes would allow state authorities direct access to platform-related transaction data, which could improve tax administration efficiency—particularly during peak summer periods when private accommodation activity rises across coastal municipalities including Budva, Kotor, Tivat, Herceg Novi and Bar.

The proposal could also influence parts of Montenegro’s real estate sector. Short-term rentals are closely tied to coastal property investment economics in premium destinations where apartment purchases are often justified by expectations of seasonal rental income. Greater reporting transparency and tighter tax compliance may gradually alter yield calculations for certain investor segments—especially smaller private operators that have relied on partially informal rental activity.

Over time, however, greater institutionalization could strengthen confidence in Montenegro’s tourism-linked markets. International investors, banks and hospitality operators increasingly emphasize transparent regulatory frameworks, formalized tourism statistics and traceable revenue structures when assessing hospitality-linked assets.

Consultation period precedes possible adoption

The government’s consultation process on the VAT-law amendments is expected to continue over the coming weeks as authorities collect feedback from tourism operators, platform participants and business associations before moving toward formal adoption of the legislation.

For policymakers balancing fiscal oversight with continued competitiveness will be central: tourism growth remains a key driver of national economic performance while private accommodation capacity continues to be essential during peak summer demand. The challenge for Montenegro will be increasing transparency and tax compliance without undermining the flexibility and investment appeal that helped fuel its tourism expansion over the past decade.