Taxation in Georgia - Special Tax Certificates

Taxation

There are only six taxes in Georgia, of which five (personal income tax, corporate income tax, Value added tax, excise tax and import tax) are nationwide, and one (property tax) is a local tax. There are no inheritance, wealth, property transfer, social, branch remittance or other taxes imposed in Georgia.

From 1 January 2017 a new model of Corporate Income Tax was enacted in Georgia, which means that for Georgian entities and foreign entities doing business in Georgia by a permanent establishment the retained profit will no longer be taxable until they are distributed. The main purpose of the new model is to encourage domestic and foreign investments by taxing businesses when they will extract the profits. Commercial banks, credit unions, insurance companies, microfinance organizations, and pawnshops will be switched to the new tax regime after 1 January 2023.

According to the Tax Code of Georgia, “A person/entity, which carries out an economic activity and the total amount of VAT taxable transactions carried out in any continuous period up to 12 calendar months exceeds GEL 100 000”, shall apply for a VAT registration to Revenue Service under Ministry of Finance of Georgia. A person/entity can also perform voluntary registration.

#	BASIC TAXES	RATE
1	Personal Income Tax	20%
2	Corporate Income Tax (Profit distribution)	15%
3	Value Added Tax (VAT)	18%
4	Excise tax	varies
5	Import Tax	0%, 5% or 12%
6	Property Tax - companies	Up to 1 %
7	Property tax — leasing companies	Up to 0.6%
8	Property tax — individuals	Up to 1%
9	Property tax — land	varies
#	TAX RATES FOR A VIRTUAL ZONE COMPANY	RATE
1	Corporate Income Tax (allowable activities: IT services)	exempt
2	Value Added Tax (VAT)	exempt
#	TAX RATES FOR FREE INDUSTRIAL ZONE COMPANY	RATE
1	Corporate Income Tax	exempt
2	Value Added Tax	exempt
3	Withholding Tax	exempt
4	Property Tax	exempt
5	Import Tax	exempt
#	TAX RATES FOR AN INTERNATIONAL FINANCIAL COMPANY	RATE
1	Gain from sale of securities (issued by non-resident persons)	exempt
2	Value Added Tax (financial operations or financial services)	exempt
#	TAX RATES FOR A SPECIAL TRADING COMPANY	RATE
1	Corporate Income Tax (on allowable activities other than supply of fixed assets used in economic activities for more than 2 years)	exempt
2	Value Added Tax (inside customs warehouse)	exempt
3	Import Tax	exempt
#	OTHER TAXES	RATE
1	Dividends paid to individuals, organizations and non-resident entities	15%
2	Dividends paid to resident companies	exempt
3	Dividends paid on free floating securities	exempt
4	Dividends paid by an international financial company	exempt
5	Dividends paid by a free industrial zone company	exempt
6	Dividends paid by an agricultural cooperative	exempt
7	Interest paid	5%
8	Interest paid to residents of offshore countries	exempt
9	Interest paid to resident banks	exempt
10	Interest paid by licensed financial institutions	exempt
11	Interest paid on free floating securities	exempt
12	Interests paid by a free industrial zone company	exempt
13	Interest paid on debt securities issued by Georgian companies and listed on a recognized foreign stock exchange	exempt
14	Interest paid by resident companies to the Government	exempt
15	Royalties paid to resident individuals	20%
16	Royalties paid to resident companies	exempt
17	Royalties paid to non-residents	10%
18	Royalties paid to residents of offshore countries	15%
19	Royalties paid to the Government	exempt
20	Management fees paid to non-residents	10%
21	Management fees paid to residents of offshore countries	15%
22	Payment of income from international transportation and international communication to non-residents	15%
23	Payments of other Georgian source income to non-residents	10%
24	Payments of other Georgian source income to residents of offshore countries	15%
24	Costs incurred not related to economic activity, Non-documented expense, Free of charge distributions, Over limit representative expenses	15%