This article outlines all of the taxes in Georgia (Country) including income tax & corporate tax rates. If you are more interested in a practical guide on how and why to move your tax residency / business to Georgia, read our guide here.
Taxation in Georgia (GTC Article 6). Summary of tax categories:
- Personal income tax
- Profit tax / Corporate Tax
- Value-added tax (VAT)
- Excise duty
- Import tax
- Property tax
In some cases, taxes must be paid by withholding agents “Article 20.2. A withholding agent shall be a person who must fulfill a taxpayer’s tax obligation in the cases and in the manner provided for by this [tax] Code”. Essentially, withholding is the responsibility of the person paying (the withholding agent), rather than the person receiving income (the taxpayer).
Definitions:
Resident: An individual or legal entity that is a tax resident of Georgia.
Legal Resident: An individual (natural person) who has a Georgian ID or Passport and has a legal residence to remain in Georgia.
Tax Year: The reporting year for Georgian taxation runs from January 1st to December 31st. The deadline for annual filing is March 31st of the following year.
Georgian Tax Rates For These Categories
Below you’ll find a summary of taxes in Georgia (Country) from each of the tax categories.
Additionally, if watching sounds better to you than reading, you can see our video about taxes in Georgia at the end of this article.
Personal Income Tax (PIT) in Georgia (Country)
These are taxes that are levied directly on the individual taxpayer.
PIT Standard rate: 20%
20% on taxable income which amounts to total income minus deductible expenses. It must be declared and paid by the 31st of March in the year following the reporting year.
PIT for Small Businesses Status
Special tax rates for Small Businesses are applied following approval of the Small Business Status. They cannot be applied retroactively to past income.
- 1% (On turnover up to 500,000 GEL per year).
- Or 3% (starts to apply after exceeding the 500,000 GEL limit).
NOTE: If gross revenue (turnover) exceeds 500,000 GEL in 2 consecutive years, the Small Business Status will be revoked.
Small business income must be declared and paid by the 15th of each month.
PIT for Micro Businesses Status: exempt (0%)
Micro businesses must declare and pay tax by the 31st of March in the year following the reporting year.
PIT for individuals renting out residential living space (situated in Georgia): 5%
Must be filed and paid by March 31st of the year following the accounting year. If the real estate you rent out is situated outside Georgia, tax is not due in Georgia but maybe in the country where the property is located.
PIT on gains derived by individuals from the sale of immovable property and vehicles: 5% (some exemptions apply). Must be paid by March 31st of the year following the sale.
PIT on capital gains derived by individuals on sales of non-Georgian stocks/bonds etc.: Typically 0%. Some exceptions may exist, and you should discuss your specific situation with a tax adviser.
PIT on cryptocurrency gains: 0%. The status of crypto as a currency is currently undetermined in Georgia law. Read more about crypto in Georgia here.
Tax on foreign dividends (from a non-Georgian entity): Depends. If the dividends are received as a passive shareholder, then 0%. This would be considered foreign source income. If you actively operate/manage that foreign business from the territory of Georgia, the situation is much more complicated. If you receive dividends from a Georgian legal entity, see the corporate tax section below.
Profit Tax / Corporate Tax
Georgia (Country) Corporate Tax Rate, Standard rate: 15%
Corporate Income Tax (CIT) is applied to the profit of LLCs and other Georgian legal entities. Typically, this tax is only levied at the time of distribution. Reinvested profits within the company can remain indefinitely without being taxed.
CIT for Virtual Zone Companies OR Free Industrial Zone (FIZ) entity: Exempt (0%)
CIT for International Company Status: 5% at the time of distribution.
Taxation in Georgia (Country): Tax Withholding
Withholding taxes can affect anyone with business expenses, contractors, or employees. This includes sole proprietors (Individual Entrepreneurs) as well as LLCs and other types of legal entities.
Salary paid to resident individuals: 20%
In addition to salary, an employer is required to pay pension contributions for employees who are citizens/permanent residents of Georgia. The contribution amounts to 2% of the gross salary withheld at the source with the additional 2% paid by the employer.
For International Company Status, salary is taxed at just 5% + pension, if applicable.
Salary paid to non-resident individuals: Up To 20%
If your employees are from countries that have a Double Taxation Avoidance (DTA) Treaty with Georgia, and if the treaty so specifies, then withholding tax can be as low as 0%, levied in Georgia.
In this case, those employees would be paid a gross salary and pay their own income taxes in their home country, as determined by their local laws.
If you have employees who are not residents of Georgia, and there is no DTA, then tax withholding may apply (20%) in Georgia. The employee may also be taxed in their home country on the income they receive. In some cases, they can apply for tax relief/credits through their local authorities.
Dividends
If a Georgian company pays dividends, they are taxed at source at the time of distribution to individuals or foreign entities.
- Dividends paid to individuals and non-resident persons: 5%
- Dividends paid by a Free Industrial Zone (FIZ) entity: Exempt (0%)
- Dividends paid by an entity with International Company Status (ICS): Exempt (0%)
Georgia does not levy additional personal income tax on dividends that you receive as a Georgian resident individual.
Interest
- Interest paid to individuals & non-resident persons (those without a Permanent Establishment) in Georgia: 5%
- Interest paid to residents of offshore jurisdictions: 15%
- Interest paid by a FIZ entity: Exempt (0%)
Royalties
- Royalties paid to resident individuals: 20%
- Royalties paid to non-resident persons: 5%
- Royalties paid to residents of offshore jurisdictions: 15%
Other
The below applies when purchasing services from non-residents.
This withholding is applied only on other Georgian sourced income that has not already had tax withheld as stipulated above. If a DTA exists between Georgia and the country of the non-resident, the withholding may not apply. Article 104 of the tax code offers more detail on the types of activities that lead to this type of withholding. An example might be a non-resident providing services to a company while on the territory of Georgia temporarily.
Other Georgian source income received by non-residents: 0 to 10%
The tax withholding rate depends on the country from which the service is supplied. Countries that have a DTA will typically lead to 0% tax withholding being levied. 10% withholding tax may apply to the purchase of services from providers based in countries that do not have a treaty with Georgia unless they are an offshore jurisdiction.
Other Georgian source income received by residents of offshore jurisdictions: 15%
If you purchase services from countries that are seen as having preferential taxation and said services are deemed to be carried out in the territory of Georgia in accordance with article 104, then withholding tax is charged at 15%. The full list of these countries is here.
VAT
Standard rate: 18%
- Applied to the domestic supply of goods/services where the seller is VAT registered.
- Applied to most types of goods at the time of importation.
- Generally not applied to the export of goods/B2B sale of services to non-residents.
- B2C sales of services have varying rules on if VAT will be applied.
If your business is VAT registered, you can claim back any input VAT, so long as your business type has the entitlement to credit.
Reverse VAT: 18%
Reverse VAT (Reverse Charge VAT) applies to the purchases of services from non-resident VATable persons.
You are required to declare and pay reverse VAT on any such purchases. This would include anything from non-resident contractors you hire to software licenses, etc.
Declaration is required whether your Georgian business is VAT registered, or not. However, if you are VAT registered, then you can declare and simultaneously claim back the 18%, making the VAT on that transaction effectively zero.
For this reason, if your Georgian business exclusively sells to foreign clients, and you have business expenses both domestic and international, it usually makes sense to become a registered VAT payer. Read more about reverse-VAT here.
Deadlines: VAT & Reverse VAT declarations must be submitted and paid by the 15th of each month.
Property Tax & Rental Income
Property owned by companies: Up to 1% (In practice, it is almost always 1%)
For leasing companies (engaged in a financial, not operational lease): 0.6%
For individuals: 0% to 1% (depending on household income, as well as the municipality in which the property in question is located).
On land: varies by type of land (agricultural or non-agricultural) and municipality.
Income from the rental of commercial property: 20%
Income from the rental of residential property: 5% (terms apply)
Tax on certain types of vehicles: 1%
A vehicle is defined thus: “Yachts (cutters), helicopters, airplanes, and motor cars specified under Code 8703 of the National Commodity Nomenclature of Foreign Economic Activities that are owned by [an individual]” (GTC Article 201(1)(c.a).
Deadlines
Individuals are required to submit their property tax declaration before 1st November and pay their property tax by November 15th of each year.
Individuals renting out residential property shall file a personal income tax return by March 31st of the year following the accounting year.
Legal entities must file property taxes by March 31st of the year following the reporting period.
Import Tax
0%, 5%, or 12%, depending on the type of goods. (GTC Article 197)
You can check the specific tax rate if you know the special code of the product OR translate the name of the product into Georgian and input the search for the name rather than the code. Or, you can sift through the very long list of all the items in Article 197 of the tax code.
Some products need special permission to be imported; the permission costs 30 GEL.
Import taxes are usually paid within 5 days (though customs might give a different deadline) of when the product arrives at the customs office.
VAT (18%) may also be applied to imported goods at the time of importation. The payment deadline is determined at customs. If VAT applies, it will do so no matter who the recipient is (whether they are a registered VAT payer or not).
Some countries are exempt from import tax – such as EU countries and a few others. VAT may still apply.
Imports of less than 300 GEL value are entirely exempt from both import tax and VAT.
Note: Article 173 of the new VAT provisions lists all the goods that are exempt from VAT on import. In addition to that, goods that are in connection with large-scale projects (pipelines, etc.) that are regulated by international treaties are also exempt.
Excise
Excise varies depending on the goods.
See Georgian Tax Code Section VII, Articles 182 to 194 for more information.
Excise duty is due to be paid by the 15th of each month on goods assessed in the preceding calendar month.
Tax Residency & Business Ownership In Georgia
Read our full guide on why to move your business and tax residency to Georgia.
Learn about the many advantages, from qualifying for the 1% tax rate to lifestyle in Georgia and the best way to avoid tax leakage during the moving process.
Free Consultation
If you are thinking of moving to Georgia or incorporating here, our expert tax advisers can help. We can also help with remote business registrations, as well as local ones.
Whether you are already here or considering the move, you can book a free tax consultation online via Zoom, or in person, to discuss your unique tax situation, if Georgia will be right for you, and the best way to minimize your taxes.
