How to properly manage the tourist accommodation business in the hotel you purchased

Here are detailed instructions on how to legally rent rooms in a hotel owned by you to tourists in Montenegro, what taxes to pay and how to complete all the documentation in order to avoid problems with regulatory authorities.

1. Legal registration and permits
   Object registration and ownership
   To rent rooms to tourists, first make sure that you have an official certificate of ownership (List nepokretosti) for the hotel or real estate. This document confirms your ownership right and is necessary for any legal procedures.
   Tourist activity permit
   In order to operate legally and receive tourists, the hotel must be registered as a facility providing accommodation services in the tourism sector. The Law on Tourism requires that all facilities rented to tourists be entered in the Central Register of Tourism and comply with minimum technical and sanitary requirements.
   If the hotel is smaller than a certain size (for example, up to 10 rooms), then it can be classified as a private accommodation facility and get permission from the local tourist office.
   Guest registration
   You are required to register each tourist with the local authorities — usually at the tourist inspection office — within 24 hours of their arrival. This is done to comply with migration and statistical requirements.

2. Commercial and tax obligations
   Tax on rental income
   The rental income of your hotel is considered as a tax base and is subject to taxation.
   The tax rate for landlords is 15% of the tax base. When calculating the tax base, you can use standard deductions (for example, up to 30% on expenses) or take into account actual expenses.
   This rule applies to both residents and non-residents of Montenegro, and the income statement is submitted annually.
   Annual property tax
   As a property owner, you also pay an annual property tax, which depends on the cadastral value of the property and is set by the municipality (for example, from 0.25% to 1% in tourist areas).
   Tourist fee
   In addition to income tax, the hotel is required to collect and transfer a tourist fee for each guest. The amount is usually about 1 euro per day per adult tourist, less often a little less, depending on the municipality.
   The hotel deducts this fee from the guests and transfers it to the local budget — this is a prerequisite for legitimate activity.
   Hotel license and classification
   If your property is classified as a commercial hotel (more than 10 rooms or more than 20 beds), additional classification, security, and insurance requirements may apply.

3. Documents and accounting
   To rent rooms to tourists, you must:

• Obtain a license or inclusion in the tourist register;
• Register each room stock and areas that you plan to rent out;
• Keep records of income and expenses, make lease agreements (or booking records);
• Submit an annual rental income statement to the local tax office (usually by the end of April next year);
• Pay the tourist fee and submit reports on it;
• Ensure that every guest must register within the prescribed period.

4. Important practical points

• Work only with decorated objects. Recent legislative changes strengthen control over illegal facilities and require technical compliance, insurance, and mandatory registration with the tourist registry.
• If the income exceeds a certain threshold, registration for VAT may be required (usually if the annual rental turnover exceeds €30,000).
• Renting rooms without registering guests and paying tourist tax is subject to fines. Control over such compliance by municipal authorities is being strengthened.