Chinese exempt from paying VAT

Contractors and subcontractors on the motorway Bar-Boljare are exempt from value added tax, personal income tax, and income and social security contributions for the contractor engaged in accordance with the said Agreement, according to the Tax Administration.

Rules of Procedure of exemption from payment of tax and customs duties for performing work on the construction of highway Bar – Boljare prescribe, as it was noted, that the contractor, when procuring the products and services for the realization of the project, pays value added tax at the rate of 0 percent, using control stamps issued by the Ministry of Finance.

“In order to properly apply mentioned legislation, direct suppliers of the contractor, the Chinese company CRBC, when delivering products and services, are obliged to issue invoices to contractor with the stated value added tax at the rate of 0%, while the control stamps are proof that the supplies are made for the needs of highway construction’’, according to a statement of the Department of Public Revenues.

It is important to emphasize that, as explained, subcontractors are required to calculate and pay VAT on the delivery of products and services for direct suppliers of the contractor at the rates and in the manner prescribed by the Law on Value Added Tax.

“During the implementation of the highway project, the Tax Administration will perform and control compliance with the above regulations as part of the regular activities”, they explained from the Department of Public Revenues.

Izvor: RTV Montenegro