Tax in Georgia

Who is the tax authority and where do filings live?

Georgia's Revenue Service under the Ministry of Finance is the tax and customs authority [SC1]. Filings flow through the eRevenue Service portal. Tax disputes proceed through Revenue Service internal review, the Tax Disputes Council, and the administrative courts. The credentialed Georgian tax-and-accounting professions are CPA Georgia regulated by the Service for Accounting, Reporting and Auditing Supervision (SARAS). Substantive law: Tax Code of Georgia (codified single statute, Law 3591-IIs of 17 September 2010), Customs Code, and successive amendment laws. Georgia is a member of the Eastern Partnership and an EU candidate country (status granted December 2023, opened-for-negotiation status pending). Georgia is not a member of the Eurasian Economic Union (in contrast to several Central Asian peers). The post-2017 Estonian-model corporate-tax framework distinguishes Georgia regionally as one of the few non-Estonian jurisdictions adopting the distributed-profits-only model.

What is the tax year and when are returns due?

The individual tax year is the calendar year. Personal annual income tax returns are due 1 April of the year following the tax year for individuals required to file (those with non-PAYE income above thresholds) [SC1]. Wage earners' income tax is fully withheld monthly by employers. Corporate fiscal years align with the calendar year (with limited exception); annual corporate income tax returns are due 1 April. Monthly distribution-tax filings apply under the Estonian-model framework where corporate distributions occur. VAT returns are filed monthly by the 15th of the following month under the standard regime. Withholding tax (WHT) returns are filed monthly. Annual financial statements are required for in-scope corporations.

Who is a Georgian tax resident?

Under the Tax Code of Georgia, an individual is tax resident in Georgia if (a) being physically present in Georgia for at least 183 days (continuously or with interruptions) in any 12-month period that ends in the relevant tax year, OR (b) holding the High Net Worth Individual (HNWI) status under specific conditions involving Georgian-investment thresholds [SC2]. Residents are taxed on worldwide income for personal income tax purposes (with foreign-source-income exclusions for certain categories under specific provisions); non-residents on Georgian-source income at flat or schedular rates. Treaty residency tie-breakers under Georgia's bilateral DTC network apply where two jurisdictions both treat a person as resident. PE attribution under Georgia treaty network and domestic Tax Code follows OECD Model definitions. The HNWI status framework provides specific tax-residency-acquisition pathway for high-net-worth foreign nationals investing in Georgia.

What are the personal income tax rates?

Flat 20 percent on most categories of personal income [SC1]. Investment income (dividends from Georgian companies) face 5 percent withholding (final). Interest from Georgian financial institutions to individuals faces 5 percent withholding (final). Capital gains under specific provisions. The Virtual Zone Person regime provides 0 percent personal income tax on IT-services exports for individuals registered as Virtual Zone Persons under specific eligibility — this framework has been a key competitive feature attracting digital-nomad and IT-services entrepreneurs to Georgia. Mandatory pension contributions add 2 percent (employee-side, post-2018 mandatory pension scheme) plus 2 percent employer-matching plus 2 percent state-matching. Specific deductions include qualifying medical expenses and certain other categories. Salaried employees have most obligations satisfied through monthly employer-side withholding.

How does Georgia's corporate tax work?

Georgia adopted the Estonian-style distributed-profits-only corporate income tax model on 1 January 2017 — a major reform aligning with Estonia's distinctive framework. Headline 15 percent applies on distributions only; retained and reinvested profits not taxed [SC2]. The Estonian-model framework substantially reduces effective tax burden for growth-stage businesses reinvesting profits. Free Industrial Zones (FIZs, with locations including Poti, Kutaisi, and Tbilisi) provide 0 percent profit tax for licensed activities. International Company status under Law 4071-IS of 8 May 2020 provides 5 percent profit tax for qualifying IT and maritime services exports — a competitive feature aligned with the Virtual Zone Person framework on the corporate side. Withholding on non-resident dividends 5 percent (treaty rates apply); royalties 5 percent default; technical-services 10 percent default; interest 5 percent default. Pillar Two implementation has not yet been formally transposed; in-scope MNE groups should monitor for legislative developments under EU-accession framework alignment. Tax loss carryforwards: not applicable under Estonian-model (since retained profits are not taxed). Transfer pricing under the Tax Code follows OECD principles with documentation requirements progressively expanded.

What about VAT?

The standard VAT rate is 18 percent under the Tax Code [SC3]. Zero-rated supplies include exports of goods and services. Exempt supplies include healthcare, education, financial services (under specific definitions), residential rental, and several other social-policy categories. Registration threshold is GEL 100,000 annual turnover. Reverse-charge mechanism applies on imported services. Foreign-supplier registration for B2C cross-border digital services applies under successive amendments. Excise Tax applies on alcohol, tobacco, fuels, and specified other goods. Customs-VAT on imports collected at the border. Bad-debt VAT relief is available under specific conditions. The progressive e-invoicing rollout has been a feature of the post-2018 modernisation.

How are cryptoassets taxed?

Georgia has not enacted dedicated cryptoasset taxation but takes a generally permissive position. Cryptoasset trading by individuals at the non-business level is generally outside the personal income tax scope under successive Revenue Service interpretive positions [SC2]. Mining and trading-frequency activity is business income at applicable rates. Free Industrial Zones host significant cryptoasset mining infrastructure leveraging low-cost hydroelectric power. Georgia has historically been one of the largest per-capita Bitcoin-mining jurisdictions globally, with Free Industrial Zone-based mining operations establishing substantial regional capacity. The National Bank of Georgia has issued advisory communications on cryptoasset risks but has not imposed prohibition. Receipt of crypto as employment compensation is taxable under standard PIT framework with GEL-equivalent value at receipt. NFTs and stablecoins fall under the same case-by-case treatment.

What is the treaty network and what are the audit triggers?

Georgia has approximately 56 active double tax treaties [SC4]. The treaty network covers UK, Germany, France, Italy, Spain, Netherlands, Switzerland, Austria, Sweden, Denmark, Norway, Finland, Belgium, Czech Republic, Poland, Hungary, Romania, Bulgaria, Lithuania, Latvia, Estonia, Russia (suspended in some respects post-2008 conflict), Ukraine, Belarus, Kazakhstan, Uzbekistan, Azerbaijan, Armenia, Turkey, Iran, China, Korea, Japan, India, UAE, Saudi Arabia, Israel, Singapore, Egypt, and several other counterparties. Georgia signed the OECD MLI on 7 June 2017 with successive ratification status. Georgia is an EU candidate country (status December 2023) progressively aligning under acquis chapters. Audit triggers include: disproportionate VAT credits relative to declared output; transfer-pricing non-compliance under the Tax Code (TPD documentation requirements progressively expanded); undeclared bank deposits flagged via expanding CRS exchanges (Georgia adopted CRS framework under successive amendments); and the post-2017 Estonian-model framework compliance regime. Standard SOL is 6 years from the tax year; extended for fraud or non-filing.

What are the common penalties and pitfalls for foreigners?

The Georgian penalty framework under the Tax Code imposes administrative-fine sanctions for late filings, failure to file, incorrect declarations, and failure to maintain accounting records [SC5]. Default interest accrues at the prevailing National Bank refinancing rate plus statutory margin on unpaid tax. Tax-evasion criminal exposure under the Criminal Code carries fines and imprisonment for grossly-significant evasion. Common foreign-national pitfalls: (1) the Estonian-model corporate tax framework requires careful distribution-event tracking — corporate-level tax is triggered only on distributions, not on retained profits; (2) the Virtual Zone Person regime 0 percent PIT on IT-services exports has specific eligibility conditions; (3) International Company status 5 percent CIT framework has specific eligibility for qualifying IT and maritime services exports; (4) Free Industrial Zones 0 percent profit tax has specific compliance requirements; (5) Pillar Two has not yet been transposed but in-scope MNE groups should monitor for EU-accession framework alignment developments; (6) the EU candidate status (December 2023) progressively brings EU-acquis tax-coordination requirements; (7) HNWI tax-residency-acquisition framework has specific Georgian-investment thresholds; (8) cryptocurrency activity benefits from generally permissive position but Free Industrial Zone mining frameworks have specific compliance; (9) the post-2018 mandatory pension scheme creates payroll-cost dynamics; and (10) treaty MLI modifications introduce PPT and other anti-abuse rules.