Will you need to file for the reporting year of 2020 in Georgian (country)? If the following is true, then probably the answer is yes. Did you:
- Spend any time in Georgia in 2020 and receive any personal income, from any source that has not already had tax paid in full to the Georgian Revenue Service? Including any income not already taxed in Georgia throughout the course of normal monthly declarations?
- Or have employment income (Foreign or Georgian) which was not taxed at source in Georgia?
You are responsible for ensuring any income you had is declared and there are penalties for failing to do so. In this article, we outline the essential considerations to help you decide if you need to file, on what income, and by when the declaration must be submitted. As well as some other considerations.
By When Must I File?
Between January 1st and March 31st of the tax year following the reporting year.
In this instance, your due date is March 31st, 2021.
The reporting period is on income generated between Jan 1st 2020 and Dec 31st 2020.
Already know you need to file? Get Your appointment time below – Click here.
What is taxed:
- Employment income on which the employer hasn’t already paid tax in Georgia.
- Rental income of properties you own in Georgia.
- Foreign business income that is not exempt (which is more types of income than many expats think) and has not been declared within a Georgian business already.
- Sales of certain types of capital items, where applicable.
- Interest gains from private sources within Georgia (not including interest within Georgian banks or interest derived abroad).
- Gambling/casino winnings, unless already taxed at source.
- In some cases, income on gains from investments and trading.
- Any other non-exempt personal income on which Georgian tax has not already been paid.
What is not taxed:
- Salary which had Georgian tax withheld at source.
- Business income that was already taxed in Georgia.
- Personal remittance between personal bank accounts of friends and family that were not payments relating to an economic activity.
- Most foreign royalty payments, interest and passive dividends where no active work took place from Georgia to generate them.
- In some cases, foreign income earned working while not physically present in Georgia. Your case for this is also stronger if it was taxed elsewhere.
- Income of those with a special status (such as diplomats, in some cases).
- Foreign pensions and social security payments.
- Any other income which is not tax liable in Georgia.
- NOTE: Property Income on real estate and vehicles, is taxed annually but is due on a different declaration from the annual income tax return.
If you do not think you were a tax resident in 2020, please see the additional info below for those who spent less than 183 days in Georgia in 2020.
Who doesn’t need to file?
Essentially, anyone who has zero tax liability in Georgia, or whose tax has been withheld at source in its entirety. For example:
- Those who had no income during the tax year. Including those who lived off savings or pensions only, or were supported entirely by a spouse, parent or a 3rd party.
- Those who have already declared every part of their income to Georgia via their monthly business declarations and have nothing else to declare.
- Those who have assessed that all of their undeclared income is not tax liable. For example, an author who lives off book royalties derived from a foreign source and has no other taxable income.
- People whose only income is employment income from a Georgian employer, who has already withheld tax on the employee’s behalf.
If you are unsure if the income you have would need to be declared, contact us with as much detail as possible about the income in question and we’ll give you a quick verdict, if possible.
I spent less than 183 days in Georgia this year. Do I still need to file an annual return?
If you did not meet the 183 day requirement to become a Georgian tax resident this year, then it depends.
Firstly, tax residency is triggered on the day you hit the 183rd day in Georgia in ANY 12 month period, not just in any calendar/tax year. This means that you could potentially trigger tax residency spending less than 183 days in Georgia in any single tax year.
- Present in Georgia Oct 1st 2019 to March 10th 2020 (161 Days),
- Absent from Georgia until Sept 1st 2020,
- Present again Sept 1st to Sept 30th (30 days), then exit.
- Total days present in 2020 = 99
- Total days present from Oct 1st 2019 to Oct 1st 2020 = 191
- Considered a tax resident for all of 2020, not in 2019.
If you definitely have not triggered tax residency, that does not necessarily mean you won’t have any tax liability, either. If you have been earning money (foreign or domestic) while living in Georgia then that income may be liable for taxation no matter how long you have been in the country.
If you intend to leave Georgia or are a remote worker who only intends to be here temporarily, read our article on remote worker tax in Georgia to help you decide your next steps.
What if I already paid tax in another country?
If a double taxation avoidance agreement (DTA) exists between Georgia and the country in question AND you are definitely not considered a tax resident of Georgia, then paying tax in the country where the agreement considers you a tax resident might be sufficient in some cases. But determining that requires further analyzing the specific DTA treaty.
If there is no DTA, or you are deemed a Georgian tax resident by the agreement, then you would be liable to pay tax on that income in Georgia, assuming the work was performed from within the territory of Georgia. In some cases you may be able to claim tax relief or tax credits against tax you paid abroad, equivalent to the value of the tax you pay in Georgia. It depends on the tax law of the country where you paid the tax.
Late Filing Charges
If you do not file by March 31st, you will pay a penalty of 50% of the tax owed, as well an additional 0.05% per day on the amount of tax owed (not including the 50% penalty fine) up until the day you pay.
The statute of limitations allows for back tax and penalties to apply retroactively for 3 years (up to 4 in certain cases) after the date when the tax became due. Interest would accrue on any tax not paid by 31st March, if a later audit discovers it was owed.
If you are not ready to file by March 31st, you can file a blank deferment before that date and then file your final declaration by June 30th. So long as you file by June 30th, you will only pay the 0.05% per day interest on your final tax bill, and pay no additional penalty.
Get Your Return Filed Professionally: Our Annual Filing Service
If you need help assessing what parts of your income would be liable to Georgian tax and need to be declared on your annual tax return, our tax advisers can help you decide.
We offer discounted filing services to those who book their spot early (Appointments in January 2021) as well as to all our contracted monthly accounting clients (100 GEL discount on any filing package).
Appointment booking is now open!
Prices from 400 GEL: Our tax filing package includes:
- 1 Hour tax consultation (We sift through your income and assess where liabilities exist)
- 1 Hour filing work + submission. Up to 15 rows. (Our accountants process up to 15 items that are tax liable, and make the submission within the RS portal).
- For our contracted monthly accounting clients, this package is discounted, starting from 300 GEL.
After the initial 1 hour consultation, we will inform you if your total filing requirements will exceed 1 hour of processing time by our team, in which case, additional filing will be charged from 150 GEL per hour. We will provide you an estimate of the total cost before work proceeds.
Due to very high demand for this service during the 3 months where declarations can be filed, please note that prices are lowest for those who book early and confirm a space in January (prices and discounts shown below).
NOTE: Payment of the final tax bill (we provide the total calculation) to the treasury, would be the responsibility of the client. The tax bill must be paid from a Georgian bank account by March 31st 2021 to avoid any interest being added to the final sum.
The final price depends on the month in which you book your filing to be completed (Calendar below) and the number of total hours your filing will take. We offer a discount for earlybirds.
Package Price Includes: 1 hour Consulting + 1 Hour Filing & Submission. Additional services charged by the hour.
March 2021 appointments:
500 GEL Package + 190 GEL Per additional hour
February 2021 appointments:
(10% Discount): 450 GEL Package + 170 Per additional hour
All prices exclude VAT (18%), which will be added to your invoice.
Clients who have an accounting contract with us, discount of 100 GEL on final filing cost.
(Qualify for the 100 GEL discount by signing up to one of our Accounting packages toady – from 150 GEL per month, minimum 3 month contract – contact us for more information)
Book An Appointment
Book Your Annual Filing Appointment Now. Slots are already filling up! Choose your January, February or March appointment below, prices vary by month, as described above.
Currently we are only accepting online meetings but if the COVID situation changes, you may be able to switch to an in-person meeting.
The 2 hour appointment includes:
- Up to 1 hour consultation.
- The rest of the leftover time will be used for filing work by our team.
- If more than 2 hours is needed for your case, we’ll discuss that at the initial consultation.
If after your initial 1 hour consultation we assess that you will not need to file in 2020, we offer a refund of up to 50% off the purchase price.