Tax Inspections in Montenegro: What to Expect and How to Prepare
Most tax inspections in Montenegro do not end in tragedy. They end in administrative findings, modest fines, and an assessment of the correct tax — often closed within days when the books are in order. The cases that go badly almost always share a pattern: missing fiscal receipts, untraceable cash, or records that cannot be produced on request.
Here is what an inspection actually looks like, what your rights and deadlines are, and what gets caught most often.
Two types of inspection
The Tax Administration Law (Zakon o poreskoj administraciji) recognises two main controls:
| Type | Where it happens | What it covers |
|---|---|---|
| Desk audit (kancelarijska kontrola) | At the tax office | Returns, tax balance sheets, taxpayer records cross-checked against the authority’s data |
| Field audit (terenska kontrola) | On business premises (or another location set by the tax authority) | On-site review of books, inventories, fiscal registers, source documents |
A single field audit may last up to 90 working days. Only the head of the tax authority (rukovodilac poreskog organa) may grant an extension, and only on an exceptional basis.
Inspections are either scheduled (part of the annual audit plan) or extraordinary (triggered by a specific signal). Common triggers include:
- Reporting inconsistencies — declared income that doesn’t match observed activity, or sales that don’t reconcile with bank deposits.
- Unusually large VAT refund claims.
- Indications of cash sales not recorded in fiscal registers.
- Sectoral campaigns — e.g. tourism and hospitality during summer.
- Public reports through the “Budi odgovoran” anonymous platform (www.budiodgovoran.me) or the Tax Administration’s call centre 19707 (working days, 8:00–16:00, free from all networks).
How an inspection unfolds
1. The inspection order (nalog za inspekcijski nadzor)
The inspection begins with a written order specifying the period under review, the type of tax to be examined, the place and time of the inspection, and the assigned inspector’s name. The order is delivered in advance — unless advance notice would compromise the inspection’s purpose, for example where unregistered activity or fraud is suspected. At the start of any field audit, inspectors present their identification and the order before requesting access.
2. Document review
Inspectors work from checklists that compare reported revenue, expenses, payroll, and VAT records against source documents — invoices, contracts, bank statements, fiscal-receipt rolls, employment contracts, and inventory records. In a desk audit this happens at the office; in a field audit, on site. You — or your authorised representative — may be asked to explain entries or supply additional documents.
If serious non-compliance is suspected (evidence of evasion, for example), inspectors may seize business books and records. In enforced collection (prinudna naplata), the tax authority may also freeze bank accounts.
3. The zapisnik
When the on-site review ends, inspectors prepare a written protocol (zapisnik) that documents what was reviewed and what was found. From the moment you receive the zapisnik, you have 3 days to submit objections or additional evidence. If new facts come to light, the inspector may issue a supplementary protocol (dodatak zapisniku).
4. The decision (rješenje)
The Tax Administration then issues a formal written decision (rješenje) detailing the revised tax base, additional tax owed, interest, and penalties. By law it must include instructions on legal remedies. From the date of delivery, you have 15 days to appeal to the second-instance authority — in practice the Ministry of Finance.
Two important points about appeals:
- An appeal does not automatically suspend the tax decision’s effect.
- Penalty enforcement is not stopped by appeal alone, unless an administrative court orders it under the rules of upravni spor.
Your rights during an inspection
| Right | What it means in practice |
|---|---|
| Right to be present | You may attend any review of your books and observe the procedure. |
| Right to legal representation | An authorised representative (punomoćnik) — accountant or attorney — may act for you in all proceedings. |
| Tax secrecy (poreska tajna) | The inspector must protect the confidentiality of information obtained. |
| Reasonable scope | An inspector exceeding legal bounds (unlawful demands, excessive seizures) can be challenged in court; if rights are violated, the authority can be ordered to pay damages and costs. |
| Time limits | Field audits are capped at 90 working days absent extraordinary extension. |
Record-keeping: the foundation under your feet
Under the Accounting Law (Zakon o računovodstvu, Sl. list CG 84/2025), retention periods are tiered:
| Document type | Minimum retention |
|---|---|
| General ledger, daybook, annual financial statements | 10 years |
| Annual wage summaries and original payslips | Permanent (indefinite) |
| Invoices, vouchers, receipts, auxiliary books, sales journals, fiscal receipt rolls | 5 years |
In practice, every contract, invoice, bank statement, and cash-register printout supporting your tax filings for the past five years should be retrievable on request. A missing original is itself a violation — and inspectors can deem unpaid tax and impose fines if income cannot be substantiated.
For the underlying VAT documentation rules, see our VAT filing guide. For payroll record-keeping (IOPPD, payslips, contribution evidence), see our payroll guide.
What inspections most often catch
The Tax Administration’s mid-2025 campaign — 3,123 regularity checks, irregularities at 567 taxpayers, 752 fines totalling €2.3 million, 26 businesses suspended — gives a clear picture of where small businesses slip up.
1. Failure to issue fiscal receipts. This is the largest single category. Under the Fiscalisation Law (Zakon o fiskalizaciji, Sl. list CG 46/2019, 73/2019, 8/2021), fines for not issuing required fiscal receipts or improperly connecting to the fiscal system run from €8,000 to €40,000 for a legal entity, €2,000 to €12,000 for an entrepreneur, and €1,300 to €4,000 for the responsible person — with possible suspension of activity for up to 90 days.
2. Unrecorded cash sales / “rad na crno”. Operating without registration or failing to issue any receipts is treated as evasion. Reassessments and significant penalties follow.
3. Fictitious or inflated invoices. Fabricated supplier invoices or overstated expenses trigger full reassessment plus penalties — and, in serious cases, criminal referral.
4. Payroll irregularities. Wages paid “off the books” or unregistered employees lead to retroactive contributions, interest, and fines for unlawful employment. For the correct mechanics — registration before the first day of work, IOPPD filings, simultaneous payment of net and contributions — see our hiring guide.
5. Late filing or late registration. Even a clean business that simply files late risks fines and a triggered control.
In the same 2025 campaign, roughly 47% of fines were collected through the early-payment mechanism: under the Misdemeanour Law (Zakon o prekršajima), paying two-thirds of the fine within the deadline set in the misdemeanour order (often 8 days) closes the matter at a one-third discount.
Preparing before an inspection arrives
The single best preparation is having books that don’t need preparing. A few habits that consistently pay off:
- Reconcile monthly. Sales totals against bank deposits, fiscal-register Z-reports against issued invoices, payroll registers against IOPPD filings.
- Run the obvious cross-checks. VAT output against turnover. Declared profit against typical industry margin. Fiscal-receipt continuity (no gaps in numbering).
- Maintain a control file. Sales records, expense receipts, bank statements, and payroll logs for the period currently exposed to audit. Indexed and retrievable.
- Document anomalies in writing. A cash sale missed because of a system failure, an unusually large repair invoice, a written-off receivable — short notes attached to the underlying documents save explanations later.
- Designate a liaison. Usually the financial officer or external accountant. Authorise them in writing to answer technical questions and hand over documents.
You have the right to accompany inspectors during a field audit. You do not have to argue at the scene. Anything you disagree with goes into the zapisnik as a recorded objection and is addressed through the formal process.
When the assessment is wrong
The procedural deadlines are short and unforgiving:
- 3 days to file objections to the zapisnik.
- 15 days to appeal the decision (rješenje) to the Ministry of Finance.
- Further appeal to the Administrative Court if the second-instance ruling stands.
Realistically, these processes can run for many months or longer, and success is far from guaranteed when the inspector’s findings are well documented. For sums large enough to matter, the cost of consulting a tax lawyer before lodging an appeal is almost always justified.
How AQ helps
The most useful thing an accountant can do for you in a tax inspection is to make the inspection boring. We keep books that reconcile across the year, document anomalies as they happen, file IOPPDs and VAT returns on time, and maintain a control file ready to be produced on request. When an inspection does arrive, we represent you on the basis of punomoćje (formal authorisation), interact with inspectors directly, draft the response to the zapisnik within the 3-day window, and — if needed — prepare the appeal. Get in touch if you want a clean control file before the next campaign rather than after a knock at the door.
References: Zakon o poreskoj administraciji (consolidated through Sl. list CG 15/2025); Zakon o računovodstvu (Sl. list CG 84/2025); Zakon o fiskalizaciji u prometu proizvoda i usluga (Sl. list CG 46/2019, 73/2019, 8/2021); Zakon o prekršajima; Tax Administration of Montenegro 2025 campaign reports. This article is for information only — for situations specific to your business, consult a licensed Montenegrin advisor.