“International Company Status” grants IT companies preferential tax regime which qualifies them for reduced rates of Corporate Tax (5%), Dividends Tax (0%), and Personal Income Tax (5%)
Eligibility:
• The applying company must have (both at the time of application and going forward) at least 98% of their annual revenue derived from activities within the allowable IT sector and
• The company seeking this status must be a Georgian enterprise operating for more than 2 years in the given sectors
Taxation
Tax rates
According to World Bank Group, Georgia Ranks as the 3rd Least Tax Burdened Country in the World, with 9.9% Total Tax Rate as a percentage of profit
Corporate Profit Tax
0% or 15%
No corporate income tax on retained and reinvested profit; profit tax applies only to distributed earnings.
Personal Income Tax
Personal income tax on salaries is 20%
Personal income tax for interest, dividend and royalty is 5%
Import Tax
0%, 5% or 12% with majority of goods taxed by 0%
Excise Tax
On few selected goods
Property Tax
Property tax is local tax in Georgia and it can no more than 1%
International Company Status
Free Industrial Zones
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.
Currently four Free Industrial Zones (FIZs) operate in Georgia in the following cities: Poti (port city), Kutaisi (third largest city) and Tbilisi (capital city).
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.
