Located at the crossroads between European and Asian markets, Georgia has made significant strides in its business and economy. Taxation in Georgia is considered one of the most favorable in the Caucasus region. Georgia is a country with low tax rates and a transparent taxation framework. The tax and customs legislation is unified under one tax code, and the Georgia Revenue Service is responsible for collecting taxes and supervising the tax environment. Despite this ease, companies often struggle with maintaining compliance with tax regulations. That’s where Georgia tax consultants step in. These service providers can ease tax management while aligning with the prevailing norms.
Understanding Taxes in Georgia
Taxes in Georgia are collected at both the state and local levels. Currently, Georgia has six flat tax rates. They are:
Corporate Income Tax (15%)
A company is considered a Georgian company if it is either incorporated or has its principal place of management in Georgia. Georgian companies are liable to Georgian corporate income tax (CIT) on their worldwide income, subject to double taxation or other international treaty reliefs. Generally, any effective international agreement takes precedence over domestic Georgian legislation, including the TCG. Also, the tax period for filing corporate tax is the calendar year. The Georgia corporate tax rate is 15%.
To file the taxes, the companies must, after registering their companies in Georgia, are required to obtain tax registration together with legal registration at the Entrepreneurial and Non-Entrepreneurial Registry of Legal Persons (the Agency), which is a public law legal entity – the National Agency of Public Register under the Ministry of Justice of Georgia.
Personal Income Tax (20%)
Personal income tax (PIT) is a tax levied on the income of individuals. Individuals who are tax residents in Georgia pay personal income tax (PIT) on their worldwide income. In contrast, tax non-residents pay PIT only on their Georgian-source income, subject to relief under a double taxation treaty.
Individuals starting economic activities are required to register with the GTA prior to their start-up and obtain a Tax ID. Georgian non-entrepreneur individuals may use a Personal ID when declaring and paying taxes without prior registration. The Georgia income tax rate is levied at 20%.
Value Added Tax (18%)
A VAT is an indirect tax. Thus, end-users of goods and services generally bear the costs of it. To put it simply, an end-user is a person who discontinues the chain of VAT taxable transactions. The VAT in Georgia is levied at 18% on all taxable transactions and imports, unless a specific provision allows for an exemption. The exact rate applies to Reverse Charge VAT (RCVAT).
Import Tax
The rate applicable to custom goods is fixed at 0%, 5%, or 12%, depending on the Harmonized System (HS) codes. Most goods fall into the 0% rate category. Most food products and construction materials are subject to tax rates of 5% or 12%. The import tax in Georgia is based on either the customs value or the physical volume of goods.
Property Tax
The resident companies of Georgia and the organizations are subject to property tax on fixed assets, uninstalled equipment, and construction in progress listed on their balance sheet, as well as leased-out property.
Non-resident companies are also subject to property tax on the same types of assets located in Georgia, including property transferred under a lease, usufruct, or any similar kind of arrangement. The Georgia property tax for companies and organizations must not exceed 1% of the property’s assessed value.
Capital Gain Tax (5%)
Profit from selling a vehicle or a house with land is taxed at 5%.
Excise Duty
The excise tax rate in Georgia ranges from GEL 0.08 to GEL 800 for one unit. It applies to the given products:
- Condensed natural gas, except for pipeline.
- Alcoholic drinks.
- Goods produced from crude oil
- Oil distillates
- Automobiles
- Tobacco products
How Can You Partner with a Reliable Georgia Tax Consultant?
BSW serves as a trustworthy tax consultant in Georgia, offering tailored services to diverse clients seeking optimal tax management solutions. Here’s how you can partner with us:
Step 1: Enquire with BSW
Navigate the BSW’s website and share your enquiry with our experts via chat, email, or WhatsApp.
Step 2: One-to-One Consultation
After assessing your requirements, you will have a personalized consultation with one of the dedicated experts.
Why Choose BSW
Business Setup Worldwide (BSW) excels as a premier partner that caters to various business needs. We specialize in multiple services designed to enhance business performance. Our track record is impeccable, demonstrating an unparalleled success rate that underscores our potential in business consultancy. Whether you want to scale your operation, secure mandatory permits, or fine-tune tax management, BSW has got you covered! Contact us now to book a free consultation!
