Georgian Law on Accounting, Reporting, Tax, and Audit
On June 8th, 2016, the old law related to the Georgian Accounting System was replaced by a new one. The main aim of the replacement was the improvement and perfection of the accounting system, the generation of audits, and financial reports. The scope, as compared to the earlier one, has been widened and has been divided into four categories, namely:
- First Category (Large Entities)
- Second Category (Medium Entities)
- Third Category (Small Entities)
- Fourth Category (Micro Entities)
VAT Registration and Double Tax Treaty in Georgia
The standard VAT rate in Georgia is 18%. Companies in Georgia are eligible for VAT payment on the basis of the following criteria:
- If the economic activities performed by a business in a span of 12 months generate a revenue of more than 100,000 GEL
- Companies engaged in the import or export of excisable goods
- Companies formed after the reorganization
Georgia maintains double tax treaties with over 57 countries, aligned with the Organization for Economic Co-operation and Development (OECD) and UN Model conventions.
Georgia VAT Number Format
Businesses that register for Value Added Tax (VAT) in Georgia are assigned a VAT registration linked to their Tax Identification Number (TIN) by the Georgian Revenue Service, which operates under the Ministry of Finance. Businesses should also comply with the country's VAT regulations, including:
- VAT return period: Monthly.
- Reverse charge mechanism: Applicable to certain services supplied by non-resident businesses.
- VAT registration threshold: Mandatory registration applies once the statutory turnover threshold is exceeded, although voluntary registration is also permitted.
Sources of Business Income in Georgia
The following income types are treated as a source of business income in Georgia:
- Interest Income
- Dividends Income
- Royalty Income
- Income from Immovable Property
- Other Income
