Deadline for Using Tax Credit

Amendments to the Law on Tax Administration

The Parliament of Montenegro adopted the Law on Amendments to the Law on Tax Administration (“Official Gazette of Montenegro”, No. 160/25 of 30 December 2025), introducing a significant change regarding the statute of limitations on taxpayers’ rights.

Particular attention should be paid to the amendments to Article 102, which relate to the refund and reallocation of overpaid tax liabilities, as well as tax credits.

Statute of limitations on the right to refund and reallocation

Under the previous legal solution, it was prescribed that the right to a refund of overpaid tax liabilities and tax credits becomes time-barred within five years, calculated from the end of the year in which the overpayment was made or the tax credit arose.

The amendments introduce a new paragraph further specifying that, within the same period, the right to reallocate those funds for the settlement of tax liabilities in subsequent tax periods also becomes time-barred.

In other words, taxpayers now have a clearly defined deadline within which they may dispose of overpaid amounts.

What does the new paragraph 2 of Article 102 introduce?

The new legal provision prescribes that:

• the right to reallocate overpaid tax liabilities and tax credits may be used for a maximum of five years
• the period is calculated from the end of the year in which the overpayment or tax credit arose
• after the expiry of that period, the taxpayer loses the right to use that amount to reduce future tax liabilities

In practice, this means that an unused tax credit is cancelled after five years, similar to the carryforward of a tax loss, which is annulled if not used within the legally prescribed period.

Why is this amendment important?

With this amendment, the legislator introduces greater legal certainty and clarity into the tax system, while at the same time imposing an obligation on taxpayers to actively monitor the status of their overpayments and tax credits.

Unused amounts after the expiry of the deadline will no longer be available, either for refund or for reallocation.