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Taxation

  1. Special Favorable Tax Regims
  2. No Social Security Tax
  3. 15% Corporate Profit Tax

Georgia is a country with low tax rates and transparent tax system. Tax and customs legislation is unified under one tax code and the collection of taxes and supervision of the tax environment is provided by Georgia Revenue Service. All tax administration procedures and customs clearances are online/web-based. There are only 6 flat taxes in Georgia:

Only property tax is a local tax, all other taxes are national. Personal income tax for interest, dividend and royalty is 5%. Georgia doesn’t have payroll, social security, capital gains, wealth or inheritance tax. Furthermore, the Tax Code of Georgia gives an opportunity to the companies to use accelerated depreciation on capital assets (including full deduction during first year) and loss carry forward for corporate profit tax purposes (10 years).

According to the Economic Liberty Act, Government is not allowed to increase national tax rates (except excise tax) or number of taxes without national referendum.

Georgia has Double Taxation Avoidance Treaties with 52 countries.

The Country doesn’t have restrictions on currency convertibility or repatriation of capital & profit.

According to Global Corruption Barometer of Transparency International, 0% of interviewed reported paying bribe to the tax administration. World Economic Forum’s Global Competitiveness Report named Georgia #9 among low tax rate economies. These emphasize the simplicity and reliability of Georgian tax system.

Pocket Tax Book - 1.16mb

Favorable Tax Regimes in the Country:

Free Industrial Zones

Currently four Free Industrial Zones (FIZs) operate in Georgia in the following cities: Poti (sea port), Kutaisi (third largest city) and Tbilisi (capital city). Businesses registered in Free Industrial Zones benefit from certain tax exemptions:

If a company produces goods for export in FIZ, it is exempt from all taxes except Personal Income Tax (20%), which is paid from employees’ salaries.

If a company imports products from FIZ to other territory of Georgia, in addition to Personal Income Tax, it has to pay VAT and 4% of revenue from national sales.

All Free Industrial Zones (FIZs) are operated by private companies and investor should rent a space from FIZ operator:

Internal Processing Customs Regime

According to Tax Code of Georgia, if a company produces goods intended for export market, it can apply for a license about “Internal Processing Regime” to the Ministry of Finance. This license will grant the company a right to import raw materials without paying import/customs tax and VAT on these materials. The Company only has to present a bank warranty (amount of bank warranty is sum of import tax and VAT). After the processing of goods, in case the end product is exported, bank warranty is released. If some of the end products will be sold in the territory of Georgia, the company will have to pay import and VAT of raw materials which were used to make those goods.

 

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