{"id":114076,"date":"2025-10-09T11:03:02","date_gmt":"2025-10-09T11:03:02","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=114076"},"modified":"2025-10-10T14:08:38","modified_gmt":"2025-10-10T14:08:38","slug":"georgia-tax","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/georgia-tax\/","title":{"rendered":"Georgia: Tax"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-114076","comparative_guide","type-comparative_guide","status-publish","hentry","guides-tax","jurisdictions-georgia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Andersen in Georgia<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/09\/logo-1080x1080-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Andersen in Georgia<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/09\/logo-1080x1080-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Tax laws and regulations applicable in Georgia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How often is tax law amended and what is the process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Significant changes in Georgian tax legislation are relatively rare and may happen once every couple of years. Amendments are typically minor adjustments or technical clarifications rather than substantial reforms that could change the tax burden. Any legislative change must be initiated as a draft law in Parliament (usually initiated by the Ministry of Finance), undergo committee hearings and revisions, and finally be approved through a parliamentary vote.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal administrative obligations of a taxpayer, i.e. regarding the filing of tax returns and the maintenance of records?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The principal administrative obligations of a taxpayer in Georgia include the timely and accurate submission of tax returns, calculations, and accounting documents to the Revenue Service. During a tax audit, or in other cases provided by the Tax Code, taxpayers are required to present all documentation necessary for the assessment and payment of taxes.<\/p>\n<p>Taxpayers must also comply with lawful instructions issued by the tax authorities to remedy identified violations of tax legislation and must not obstruct the performance of their official duties. In addition, all documents required for determining the taxable object must be retained for a minimum of three years, calculated from the end of the calendar year of the relevant tax period.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who are the key tax authorities? How do they engage with taxpayers and how are tax issues resolved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p style=\"text-align: justify\"><span lang=\"EN-US\">The principal tax authority in Georgia is the <strong>Revenue Service<\/strong>, which oversees compliance with tax obligations and manages day-to-day tax administration. Most taxpayer interactions, such as -filing returns, making payments, and undergoing audits, occur directly through the Revenue Service.<\/span><\/p>\n<p style=\"text-align: justify\"><span lang=\"EN-US\">In certain cases, the <strong>Ministry of Finance<\/strong> also plays a role in tax matters. For example, certain decisions of the Revenue Service may be appealed before the <strong>Dispute Resolution Board<\/strong> operating under the Ministry of Finance. The Ministry is also responsible for shaping the country\u2019s broader tax policy. <b><\/b><\/span><\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are tax disputes heard by a court, tribunal or body independent of the tax authority? How long do such proceedings generally take?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Tax disputes in Georgia initially proceed before the Revenue Service itself. Tax assessment acts issued by the Audit Department may first be challenged within the Revenue Service. If the taxpayer is dissatisfied with the outcome, the decision can be appealed before the Dispute Resolution Board at the Ministry of Finance. Should the taxpayer remain unsatisfied, the matter may then be taken to the Georgian court system for final adjudication.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical deadlines for the payment of taxes? Do special rules apply to disputed amounts of tax?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Deadlines vary depending on the type of tax:<\/p>\n<ul style=\"padding-left: 0\">\n<li>Personal Income Tax (PIT): Except for withholding at source, individuals must file annual income tax returns by 1 April of the year following the reporting year. Employment income is withheld monthly at source and remitted by the 15<sup>th<\/sup> day of the following month.<\/li>\n<li>Corporate Income Tax (CIT): Georgia applies the so-called Estonian model, under which undistributed or reinvested profits are not taxed. Instead, CIT arises upon distribution of profits, certain non-business expenses, gratuitous supplies of goods or services, or representative expenses. The reporting period is a calendar month, with payment due by the 15<sup>th<\/sup> of the following month.<\/li>\n<li>Value Added Tax (VAT): The reporting period is also a calendar month, with payment due by the 15<sup>th<\/sup> of the following month.<\/li>\n<li>Property Tax: the reporting period is calendar year, with the filling deadline by 1 April of the year following the reporting year.<\/li>\n<\/ul>\n<p>Where a tax assessment is under dispute, enforcement of the assessment is suspended until the appeal process is concluded. The taxpayer is obliged to settle the liability only once the dispute has been finally resolved.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are tax authorities subject to a duty of confidentiality in respect of taxpayer data?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the Georgian Tax Code, tax authorities are bound by strict confidentiality obligations with respect to taxpayer information. Tax data may not be disclosed to third parties except in cases expressly provided by law, such as court proceedings or information exchange under international agreements. Notably, information about the amount of any person\u2019s tax liability is public.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is this jurisdiction a signatory (or does it propose to become a signatory) to the Common Reporting Standard?  Does it maintain (or intend to maintain) a public register of beneficial ownership?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia became a signatory to the Common Reporting Standard (CRS) on 9 November 2022, with the first automatic exchange of information in September 2024. Georgia does not currently maintain a public register of beneficial ownership.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the tests for determining residence of business entities (including transparent entities)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the Georgian Tax Code, a business entity is considered resident in Georgia if its place of business activity and\/or management is in Georgia. The place of business activity is generally the place of state registration; in the absence of such, it is the legal address specified in the entity\u2019s founding documents. If this information is not available and the place of main business activity cannot be determined, residence is established by the place of management.<\/p>\n<p>The place of management is defined as the location where the entity\u2019s management body (such as the board of directors) carries out its decision-making functions, regardless of the location of its controlling bodies or the place where income is generated. Accordingly, determining residence requires identifying where the company\u2019s activities and\/or effective management are carried out. However, in practice, the Georgian tax authorities mostly rely on the registration and if a company registered abroad has certain presence in Georgia, it may be treated as a permanent establishment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do tax authorities in this jurisdiction target cross border transactions within an international group? If so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Cross-border transactions between related parties are closely monitored through Georgia\u2019s transfer pricing regime. The legislation establishes criteria for determining related-party relationships and provides methodologies for identifying and assessing controlled transactions.<\/p>\n<p>Georgia has also implemented country-by-country reporting (CbCR) in line with BEPS Action 13, requiring multinational enterprise groups that meet the applicable thresholds to submit detailed reports on their global allocation of income, taxes, and economic activity.<\/p>\n<p>In addition, the tax authorities actively manage tax audits to ensure compliance with transfer pricing rules and the proper reporting of cross-border transactions. Such audits are a key enforcement tool, enabling the Revenue Service to challenge non-arm\u2019s-length pricing and adjust taxable income where necessary.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a controlled foreign corporation (CFC) regime or equivalent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, Georgia does not currently have a controlled foreign corporation (CFC) regime or an equivalent set of rules in place.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a transfer pricing regime?  Is there a \"thin capitalization\" regime?  Is there a \"safe harbour\" or is it possible to obtain an advance pricing agreement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia operates a transfer pricing regime in line with OECD principles, as discussed under Question 9. The legislation provides methodologies for assessing related-party transactions and the Revenue Service actively monitors compliance.<\/p>\n<p>A thin capitalization regime previously existed in legislation but never came into effect, and the rules were formally abolished in 2017. Nonetheless, the Ministry of Finance may apply criteria, such as the debt-to-equity ratio, when considering whether a loan should be reclassified as equity for tax purposes, in line with the OECD Transfer Pricing Guidelines.<\/p>\n<p>There are no safe harbour rules in Georgia. However, it is possible to obtain an advance pricing agreement (APA) with the Georgian Revenue Service. Such agreements are concluded prior to the commencement of controlled transactions and specify the criteria, methods, and assumptions to be applied in determining arm\u2019s length pricing. If a taxpayer complies with the terms of the APA, the authorities cannot impose contrary adjustments or sanctions in respect of the covered transactions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a general anti-avoidance rule (GAAR) and, if so, how is it enforced by tax authorities (e.g. in negotiations, litigation)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia\u2019s tax system embeds a form-over-substance principle within its general anti-avoidance framework, empowering tax authorities to look beyond the legal form of a transaction to its true economic substance. If a taxpayer\u2019s arrangement lacks economic logic or does not reflect the actual substance of an operation, the Revenue Service may reclassify it to reflect substance over form. This enables the authority to disregard artificial constructs designed solely for tax advantage.<\/p>\n<p>In practice, this recharacterization tool is applied during audits and reassessments, particularly where cross-border or intra-group transactions are involved. While Georgia does not codify a standalone GAAR, the principle is recognized and enforced through an assessment of whether the formal structure aligns with economic reality.<\/p>\n<p>Besides this, Georgia, as the signatory to the MLI, actively employes principal purpose test, as well as beneficial ownership test provided under the relevant treaty provisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a digital services tax? If so, is there an intention to withdraw or amend it once a multilateral solution is in place?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, Georgia does not levy a digital services tax, nor are there any announced plans to introduce one.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have any of the OECD BEPS recommendations, including the BEPS 2.0 two-pillar approach been implemented or are any planned to be implemented?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia has been an active participant in the OECD\/G20 Base Erosion and Profit Shifting (BEPS) project since joining the Inclusive Framework on 14 June 2016. Membership entails implementing the four BEPS minimum standards and undergoing peer review on an equal footing with OECD and G20 members.<\/p>\n<p>On treaty measures (Action 6), Georgia signed the Multilateral Instrument (MLI) at the inaugural ceremony on 7 June 2017 and has since advanced the MLI through its domestic processes, using it to incorporate anti-abuse rules and improve dispute-resolution provisions across its treaty network.<\/p>\n<p>On harmful tax practices (Action 5), Georgia\u2019s preferential regimes have been reviewed by the Forum on Harmful Tax Practices (FHTP) and are currently assessed as compliant, with no recommendations outstanding. Georgia also participates in the work of the FHTP and has embedded spontaneous exchange of information mechanisms as required under Action 5.<\/p>\n<p>On country-by-country reporting (Action 13), Georgia signed the Multilateral Competent Authority Agreement on 30 June 2016 and, in June 2024, introduced updated CbCR rules through ministerial order, applying them to multinational enterprise groups in line with OECD standards.<\/p>\n<p>On dispute resolution (Action 14), Georgia participates in the MAP Forum and successfully completed the 2016\u20132024 peer-review cycle with no recommendations, demonstrating the effectiveness of its mutual agreement procedure framework.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How has the OECD BEPS program impacted tax policies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia has embraced the BEPS initiative from the outset, reflecting its commitment to global tax standards. The country has systematically incorporated BEPS minimum standards into its legal framework: modernising tax treaties, reinforcing anti-abuse rules, establishing robust mutual agreement procedures, and introducing country-by-country reporting and enhanced transparency measures. These reforms have ensured that Georgia\u2019s preferential tax regimes remain compliant with international expectations while fostering a reputation for cooperation and tax clarity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax system broadly follow the OECD Model i.e. does it have taxation of: a) business profits, b) employment income and pensions, c) VAT (or other indirect tax), d) savings income and royalties, e) income from land, f) capital gains, g) stamp and\/or capital duties? If so, what are the current rates and how are they applied?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Georgian tax system is composed of six main taxes, five of which are state-level and one local. These include Corporate Income Tax (CIT), Personal Income Tax (PIT), Value Added Tax (VAT), Excide Tax, Import Tax and Property Tax.<\/p>\n<p>Corporate income tax is levied under the so-called Estonian model, meaning that retained earnings remain untaxed while taxation arises only upon distribution. Distributed profits are subject to a 15% corporate income tax, while dividends are further taxed at source at a rate of 5%. Additionally, certain expenses (deemed distributions) that are not related to economic activity, gratuitous supplies of goods and services, cash transfers, as well as representation costs exceeding statutory thresholds are also subject to corporate taxation.<\/p>\n<p>Employment income is taxed at a flat rate of 20% at source. Employers are also required to make mandatory pension contributions on behalf of employees: 2% of the gross salary at the employer\u2019s expense, matched by 2% withheld from the employee\u2019s income. Pension contributions, however, applies only to the citizens and permanent residents of Georgia.<\/p>\n<p>Value-added tax (VAT) applies to the supply of goods and services in Georgia at the standard rate of 18%.<\/p>\n<p>Savings income is generally subject to a 5% withholding tax. Royalties are taxed depending on the status of the recipient: payments to resident individuals and permanent establishments of non-residents are taxed at 20% at source, while royalties received by non-residents from Georgian sources not attributable to a permanent establishment are subject to withholding tax at a reduced rate of 5%.<\/p>\n<p>Although the legislation does not specifically define \u201cincome from land\u201d as a separate category, personal income tax and corporate income tax usually include income from any source in their tax base.<\/p>\n<p>Same goes for capital gains taxation, which is included in the CIT base. As for PIT, it depends on the nature of the asset: gains from the sale of residential property or vehicles by individuals are taxed at 5%, whereas other capital gains are subject to the standard 20% rate.<\/p>\n<p>Georgia does not impose stamp duties or capital duties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is business tax levied on, broadly, the revenue profits of a business computed in accordance with accounting principles?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia applies the so called Estonian-style corporate income tax model, under which corporate taxation is triggered only upon the distribution of profits rather than on annual accounting profits. In practice, this means that retained earnings, reinvested profits, and business activities in the ordinary course are not subject to current taxation. Tax is levied only when profits are distributed, when expenses are incurred that are not related to economic activity, when goods or services are supplied free of charge, when cash transfers are made without consideration, or when representation expenses exceed statutory limits.<\/p>\n<p>This framework provides businesses with a strong incentive to reinvest earnings and expand operations without incurring an immediate tax burden.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are common business vehicles such as companies, partnerships and trusts recognised as taxable entities or are they tax transparent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Entities incorporated under Georgian law are generally recognised as separate taxable persons and are subject to corporate income tax under the rules described above. By contrast, unincorporated associations, such as partnerships, do not constitute independent taxpayers in the same sense. Instead, they act as pass-through vehicles with specific withholding and reporting obligations. For instance, a partnership is required to withhold tax at source on income distributed to its individual members and to maintain accounting records that allocate profits and expenses proportionally to each partner\u2019s share. Such partnerships, however, are extremely rare in recent practice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is liability to business taxation based on tax residence or registration?  If so, what are the tests?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Georgia, the tax liability of a business depends on whether the entity is considered resident or non-resident for tax purposes. Under the law, the decisive factor is tax residence rather than mere registration, including the place of management and the place of economic activity. However, in practice, the Georgian tax authorities mostly rely on the registration and if a company registered abroad has certain presence in Georgia, it may be treated as a permanent establishment.<\/p>\n<p>Resident companies are subject to corporate taxation on distributed profits, expenses not connected with economic activities, gratuitous supplies of goods or services, cash transfers made without consideration, and representation expenses exceeding statutory thresholds.<\/p>\n<p>Non-resident entities may be taxed in two distinct ways. Where a non-resident operates through a permanent establishment in Georgia, the permanent establishment is taxed in the same manner as a Georgian company, on distributions and non-business expenses as described above. Where income is derived from Georgian sources but is not attributable to a Georgian permanent establishment, such income is generally subject to withholding tax at source, without deductions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any favourable taxation regimes for particular areas (e.g. enterprise zones) or sectors (e.g. financial services)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia has introduced several preferential tax regimes designed to encourage investment in specific industries and activities. Companies granted Virtual Zone Person status benefit from a 0% corporate income tax rate on profits derived from IT-related services provided outside Georgia. In addition, International Company status, also aimed primarily at the IT sector, applies a reduced 5% rate of both corporate income tax and personal income tax, while dividends distributed under this regime are exempt from taxation.<\/p>\n<p>Georgia also offers Free Industrial Zones (FIZs), located in Tbilisi, Kutaisi and Poti, where businesses enjoy broad exemptions from corporate income tax, VAT, import duties, and property tax, making them highly attractive for manufacturing and logistics activities targeting export markets.<\/p>\n<p>A special tax regime also exists for investment funds, which may benefit from exemptions from profit tax and withholding tax in certain circumstances. Beyond this, Georgia provides targeted incentives for innovative and R&amp;D startups, supporting the development of high-value sectors. Furthermore, companies qualifying as special trading companies, primarily engaged in re-export activities, enjoy tax benefits tailored to support Georgia\u2019s role as a regional trade hub.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any special tax regimes for intellectual property, such as patent box?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia does not currently operate a specific tax regime dedicated to intellectual property, such as a patent box. Intellectual property income is therefore taxed under the general rules of corporate or personal income taxation, without preferential treatment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is fiscal consolidation permitted? Are groups of companies recognised for tax purposes and, if so, are there any jurisdictional limitations on what can constitute a tax group? Is there a group contribution system or can losses otherwise be relieved across group companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. Georgian tax law does not provide for fiscal consolidation or group taxation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any withholding taxes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgian tax legislation provides for a number of withholding tax obligations. Employers are required to withhold personal income tax at source at a flat rate of 20% on employment income.<\/p>\n<p>Dividends are subject to withholding at a rate of 5%. Interest payments are generally taxed at source at 5%, and Royalties are subject to the same treatment. In addition, payments made to non-residents that constitute Georgian-source income are subject to withholding tax at a standard rate of 10%, unless otherwise reduced under an applicable double tax treaty.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any environmental taxes payable by businesses?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia does not currently levy specific environmental taxes on businesses.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is dividend income received from resident and\/or non-resident companies taxable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Dividend income received by individuals is taxable only if it originates from a Georgian company. Dividends received from non-resident companies are not considered Georgian-source income and are therefore not subject to taxation in Georgia.<\/p>\n<p>For corporate recipients, dividends from foreign companies (other than those registered in jurisdictions with preferential tax regimes) are not treated as taxable profit distributions. As Georgia applies the Estonian corporate income tax model, such dividend income remains untaxed until it is further distributed, and even then, the initial receipt of foreign dividends does not in itself trigger corporate taxation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the advantages and disadvantages offered by your jurisdiction to an international group seeking to relocate activities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Georgia offers several advantages to international groups. The corporate income tax regime, based on the Estonian model, exempts retained and reinvested earnings, creating a favourable environment for reinvestment and growth. Additional incentives are available under special regimes such as Free Industrial Zones and Virtual Zones, which provide significant tax benefits. The jurisdiction is also well regarded for its ease of doing business, featuring straightforward company registration procedures, relatively low compliance costs, and a strategic geographic location at the crossroads of Europe and Asia, complemented by an extensive network of free trade agreements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3382<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/114076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=114076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}