# Taxation in Georgia (country)

Part of a series on :
Taxation :
An aspect of fiscal policy :
Policies
Government revenue
Property tax equalization
Tax revenue
Non-tax revenue
Tax law
Tax bracket
Flat tax
Tax threshold
Exemption
Credit
Deduction
Tax shift
Tax cut
Tax holiday
Tax amnesty
Tax advantage
Tax incentive
Tax reform
Tax harmonization
Tax competition
Tax withholding
Double taxation
Representation
Unions
Medical savings account :
Economics
General Theory
Price effect
Excess burden
Tax incidence
Laffer curve
Optimal tax
Theories
Optimal capital income taxation
Distribution of Tax
Tax rate
Flat
Progressive
Regressive
Proportional :
Collection
Revenue service
Revenue stamp
Tax assessment
Taxable income
Tax lien
Tax refund
Tax shield
Tax residence
Tax preparation
Tax investigation
Tax shelter
Tax collector
Private tax collection
Tax farming :
Noncompliance
General
Tax avoidance
Repatriation tax avoidance
Tax evasion
Tax resistance
Tax shelter
Debtors' prison
Smuggling
Black market
Unreported employment
Corporate
Tax inversion
Transfer mispricing
Base erosion and profit shifting (BEPS)
Double Irish
Dutch Sandwich
Single Malt
CAIA
Locations
Tax havens
Corporate havens
Offshore financial centres (OFCs)
Offshore magic circle
Conduit and sink OFCs
Financial centres
Financial Secrecy Index
Major examples
Ireland as a tax haven
Ireland v. Commission
Leprechaun economics
Liechtenstein tax affair
Luxembourg Leaks
Offshore Leaks
Paradise Papers
Panama Papers
Swiss Leaks
United States as a tax haven
Panama as a tax haven :
Types
Direct
Indirect
Per unit
Ad valorem
Aviation
Airport improvement
Landing
Solidarity
Capital gains
Expatriation
Consumption
Departure
Hotel
Sales
Stamp
Television
Tourist
Value-added
Dividend
Environmental tax
Carbon
Eco-tariff
Landfill
Natural resources consumption
Severance
Steering
Stumpage
Excise
Alcohol
Cigarette
Fat
Meat
Sin
Sugary drink
Tobacco
General
Georgist
Gift
Gross receipts
Hypothecated
Income
Inheritance (estate)
Land value
Luxury
Payroll
Pigouvian
Property
Resource rent
Single
Surtax
Turnover
Use
User charge/fee
Congestion
Fuel
Road/GNSS
Toll
Vehicle miles traveled
Corporate profit
Excess profits
Windfall
Negative (income)
Wealth :
International
Financial transaction tax
ATTAC
Currency transaction tax
European Union Common Consolidated Corporate Tax Base (CCCTB)
Global minimum corporate tax rate
Robin Hood tax
Tobin tax
Spahn tax
Tax equalization
Tax treaty
Exchange of Information
Permanent establishment
Transfer pricing
European Union FTT
Foreign revenue rule :
Trade
Custom
Duty
Tariff
Import
Export
Tariff war
Free trade
Free-trade zone
Trade agreement
ATA Carnet :
Research
Academic
Mihir A. Desai
Dhammika Dharmapala
James R. Hines Jr.
Ronen Palan
Joel Slemrod
Gabriel Zucman
Advocacy groups
Institute on Taxation and Economic Policy (ITEP)
Oxfam (UK)
Tax Foundation (US)
Tax Justice Network (TJN)
Tax Policy Center (US) :
Religious
Church tax
Eight per thousand
Teind
Tithe
Fiscus Judaicus
Leibzoll
Temple tax
Tolerance tax
Jizya
Kharaj
Khums
Nisab
Zakat :
By country
All Countries
List of countries by tax rates
Tax revenue to GDP ratio
Tax rates in Europe
Individual Countries
Albania
Algeria
Argentina
Armenia
Australia
Azerbaijan
Bangladesh
Bhutan
Brazil
Bulgaria
BVI
Canada
China
Colombia
Croatia
Denmark
Finland
France
Germany
Greece
Hong Kong
Iceland
India
Indonesia
Iran
Ireland
Israel
Italy
Japan
Kazakhstan
Lithuania
Malta
Morocco
Namibia
Netherlands
New Zealand
Norway
Pakistan
Palestine
Peru
Philippines
Poland
Portugal
Russia
South Africa
Sri Lanka
Sweden
Switzerland
Taiwan
Tanzania
United Arab Emirates
United Kingdom
United States
Uruguay :
Business portal
Money portal :
vte :
Taxes in Georgia are collected on both national and local levels. The most important taxes are collected on national level, these taxes include an income tax, corporate taxes and value added tax. On local level property taxes as well as various fees are collected. There are 6 flat tax rates in Georgia: corporate profit tax, value added tax, excise tax, personal income tax, import tax and property tax.
Personal income tax in Georgia are collected at a flat rate of 20% on local-source income. Foreign-source personal income is tax-exempt. However, the definition of "foreign-source" is widely mis-represented, and further reading of the tax code reveals that income from abroad, earned through active work (on a laptop, for example) while physically present in Georgia, would be considered Georgian-source even if said income was never remitted to Georgia or derives from a foreign source. Personal income tax for interest, dividend and royalty is 5%. There are few allowances deductible.
Value-added tax (VAT) is collected at a flat rate of 18%.There are few exceptions, nearly all goods and services are subject to VAT. Medical care, exports and education are exempt from VAT. Regardless of turnover a taxpayer have to register for VAT if it produces or imports goods. Turnovers of less than 100,000 GEL is exempt.
Corporate taxes are levied at a flat rate of 15%, which was enacted in 2008. From 2017 onward, non-distributed profits are exempt from taxation. Very few deductions are accessible. This system was set up to attract foreign investment. Furthermore, excise taxes are on some luxury and environmentally damaging goods, such as gasoline. Customs apply to some imported goods, too. Only six different taxes apply.
| Corporate profit tax | Value added tax (VAT) | Excise tax | Personal income tax (local income) | Personal income tax (foreign income) | Import tax | Property tax | Property sell tax |
| 15% | 18% | On few selected goods | 20% | Tax exempt (in limited cases, see below) | 0%, 5%, 12% | Up to 1% | 5% |

## Special Tax Regimes
### Free Industrial Zone Entities

Free Industrial Zone entities are created for production / manufacturing, processing, provision of any kind of services within Free Industrial Zone. Therefore, their aim is to create a platform for manufacturing, processing of goods and their export from Georgia.
Free Industrial Zone entities are exempt from almost all taxes within the income received from mentioned eligible activities. Namely, if conditions are met - Free Industrial Zone entities might be subject to 0% tax on Corporate Income Tax, 0% Dividend tax, 0% Property tax, 0% Import tax and 0% VAT, 0% Reverse Charge VAT.

### Entities with international company Status

New type of International Company status was introduced in 2020, changing the old status of International Financial Company. New International Company status gives reduced tax rates for eligible entities. In order to obtain respective status the company shall either itself has been providing allowed activities for a period of more than 2 years, or the company whose representative it is.

#### Permitted activities for IT sector

In IT sector, the enterprise has the right to render the activities listed below:
- Software release;
- Releasing of computer games;
- Releasing of other software;
- Computer programming, consulting and related activities;
- Computer programming activities;
- Consulting activities in the field of computer technology;
- Computer management activities;
- Other activities related to information technologies and computer services;
- Other activities in IT sector:
* production and / or delivery of digital products, including software support and delivery of updated versions of software;
* website development and / or delivery;
* web hosting, remote maintenance of software and hardware;
* software and related updates;
* provide images, texts and information to ensure access to a database;
* remote system administration;
* online delivery of allocated memory capacity;
* grant access to or download software (including purchasing / accounting software or antivirus software) and updates;
* Banner ads blocking programs;
* download drivers, such as software that connects computers to peripherals (such as a printer);
* automatic online installation of filters on websites;
* automatic online installation of firewalls.

#### Permitted Activities for Maritime Industry

Permitted Activities for Enterprises in maritime sector are commercial and maintenance services by a shipowner and / or those related to ship-ownership, including:
* ship rental with or without a crew (bareboat charter)
* route planning and / or analysis;
* giving route instructions to a ship's captain as agreed with the charterer of vessels;
* the counting of stallia, disbursement report analysis and management;
* managing disputes over cargo-related claims, commercial and legal issues, and written chartering agreements;
* organizing new shipbuilding orders and / or the service of buying and selling used ships;
* supervising the physical condition of a ship and / or supplying a ship with relevant technical parts and/or food products;
* coordinating shipbuilding, ship docking and repair activities, and conducting inspections in accordance with the requirements of industry regulators;
* ensuring compliance with the ISM Code, an international standard for the safe management and operation of ships and for pollution prevention, with the requirements of state control over flags and ports, and with the rules of a classification association.

#### Tax rates

The following tax incentives are set by Georgian Tax Code for international companies:
* Corporate income tax: 5% (instead of regular 15%),
* Employees' personal income tax: 5% (instead of regular 20%),
* Withholding tax on dividends: 0% (instead of regular 5%),
* Property tax (other than land): exempted, in case the property is used only for the activities allowed under the status (instead of regular percentage which is up to 1% depending on type of the property and the exemption does not include property tax on lands).

## Real Estate Taxes

Property owners in Georgia are subject to the following taxes:
* Property tax
* Income tax
* VAT (in some cases)

### Property tax

Anyone who owns a property (real estate or movable property) and whose income from the Georgian sources exceeds 40,000 Georgian Laris have to pay an annual property tax which in most cases is 1% of the market value of the property.

### Income tax on real estate in Georgia

Income tax is paid in two different cases:
* When the owner of the real estate sells the property within two years from the buying, your income from the sale is subject to a 5% tax. Income is determined as the difference between the purchase and the selling price. If the owner sells property after two years, no income tax is applied.
* When the owner of the property rents out the real estate 5% tax on rent (if rented for a living purposes). To do so, you need to register with the Tax Service Portal and obtain a taxpayer identification number. Otherwise, you will be required to pay 20% of the difference between your income and expenses, as well as a penalty. Renting out commercial real estate is subject to a 20% tax on the difference between income and expenses.

### VAT on real estate
#### Rental

In case rental income for the last 12 months exceeds 100,000 GEL, then the owner of the properties are subject to mandatory VAT payer registration and will need to pay VAT for the income you generate from the rent.

#### Sale

VAT on selling apartment is paid only in case the property owner sell as a business. Meaning that buying and selling apartments is a business. For individuals selling their real estate, there's no VAT registration or pay obligation.