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TAX

Georgian taxation system is based on the Tax Code of Georgia, regulations adopted by the Ministry of Finance and international treaties and bilateral agreements adopted by the Country in this field.

Georgia introduces personal income tax (PIT) as a withholding tax of 20%. While Georgian residents are subject to payment of PIT at their Georgian and foreign source income, foreign residents are taxed at their Georgian-source income only.

While the same rational as to the source of taxation applies to corporations, corporate income tax (CIT) is fixed at 15% for Georgian residents and 10% for foreign resident companies.

Georgia adopts the European-style value added tax (VAT) system and taxes sale of goods and delivery of services at 18% of transaction value. VAT administration is based on mandatory and voluntary VAT registrations, determining obligation to pay VAT to the State budget and the right to offset the paid sums against any other applicable taxes the VAT payer may have time after time.

There are special treatment for specific categories of withholding taxes on interest, dividends and royalties taxed at 5% at the source of payment.

Unlike to the mentioned taxes, which are administered by the State, land tax is administered by local municipalities who are setting tax rates for land owners up to the statutory limit of 1% of the value of the land.

Georgia enforces double taxation avoidance regimes with major trade partners and is currently party to treaties on Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital with 46 countries.