General Overview of Georgia's Tax System

Georgia offers a business-friendly and investor-oriented tax regime, consistently recognized by the World Bank and other institutions for its simplicity and ease of compliance. Whether you are an international entrepreneur, a multinational group, or a domestic company, understanding Georgia’s core tax structure is vital for compliance and strategic planning.

Digital Tax Administration in Georgia

Every taxpayer in Georgia is granted access to a personal electronic account on the official portal of the Revenue Service of Georgia. Through this online system, taxpayers can:

File tax returns
Issue and manage VAT invoices
Submit refund and exemption applications
Communicate with tax authorities
Appeal tax decisions

This system makes Georgia’s tax administration one of the most digitalized in the region, and almost every action can be done through this portal, electronically.

Taxes in Georgia

There are six primary types of taxes under Georgian legislation: Corporate Income Tax (CIT), Personal Income Tax (PIT), Value Added Tax (VAT), Import Tax, Excise Tax, and Property Tax. Below is a summary table outlining the key features of each tax type:

Type of tax	Taxable object	Tax rate	Tax filing deadline	Payment deadline
CIT	Distributed profits and non-qualifying expenses	15%	Monthly – 15^th of the month following the reporting month	Monthly – 15^th of the month following the reporting month
PIT on salary income	Salary income – any compensation or benefit received by a natural person as a result of employment/being a director of a company	20%	Monthly – 15^th of the month following the reporting month	Upon making payment, and when making non-monetary disbursements, the last day of the respective month
VAT	Supply of goods/services in the territory of Georgia.	18%	Monthly – 15^th of the month following the reporting month	Monthly – 15^th of the month following the reporting month
Import Tax	Customs value of imported goods	0%/5%/12%	Upon importing	5 days after importing goods
Excise Tax	Supply/import of excisable goods	Depends on the specific goods	Monthly – 15^th of the month following the reporting month	Monthly – 15^th of the month following the reporting month
Property Tax	Average annual net book value of taxable property located in Georgia	Up to 1%	Yearly – 1^st of April of the year following the reporting year	Yearly – 1^st of April of the year following the reporting year

Corporate Income Tax (CIT)

Corporate tax income General Overview of Georgia’s Tax System

In 2017, Georgia transitioned from a traditional corporate income tax system to the Estonian model, where retained earnings are not taxed – only distributed profits or non-business expenses trigger CIT liability.

Taxable Events under CIT

According to the Tax Code of Georgia (TCG), CIT at 15% applies to:

Distributed profits (e.g., dividends)
Expenses unrelated to economic activity
Free delivery of goods/services or transfer of funds
Representative expenses exceeding the statutory limit (1% of the past year’s income or expenses, whichever is higher)

To calculate CIT, the tax rate is applied to the taxable object (the amount of disbursement made) described above, divided by 0.85. For instance, if a company has distributed GEL 85,000 to its shareholders as dividends, the respective CIT will be 85,000 / 0.85 * 15% = GEL 15,000.

Below, we provide a more detailed overview of all the taxable objects. This approach encourages reinvestment and significantly benefits companies aiming to grow operations domestically and regionally.

Value Added Tax (VAT)

Standard VAT Framework

In 2021, the Parliament of Georgia introduced major changes in the VAT chapter of the Tax Code of Georgia. As a result of these changes, Georgia aligned its VAT regulations with EU legislation – specifically the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.

VAT in Georgia applies at a flat rate of 18% on the supply of goods and services within the country by a taxable person. A taxable person is defined broadly as any individual or legal entity independently conducting economic activity.

Place of Supply Rules

Goods: The place of supply is typically where goods are located at the time of delivery or where transportation begins (for transported goods).
Services: Determined by the nature of the service. For B2B services, the place of supply is usually the location of the recipient. For B2C services, the place of supply is usually the location of the provider. However, this general rule may be overridden by a specific rule. For instance, the place of supply of services related to immovable property is based on the property’s location, the place of supply of digital B2C services is based on the place of the buyer’s establishment, etc.

Reverse-Charge VAT

Where a non-resident supplies services to a Georgian-resident business, the recipient must account for VAT using the reverse-charge mechanism. This shifts the obligation to the recipient, who pays VAT and may be eligible to deduct it in the same reporting period.

VAT on Digital Services

Georgia imposes VAT obligations on non-resident suppliers of digital services to individual consumers (B2C) in Georgia, even if the supplier has no physical presence, permanent establishment, or residency in Georgia, mirroring the EU VAT on digital services rules

According to the Tax Code of Georgia, the obligation to calculate and pay VAT arises for a non-resident person if:

The place of supply of the digital service is Georgia.
The recipient is a non-taxable person (i.e., a private individual); and
The transaction is not subject to reverse-charge (which applies only in B2B cases).

In such B2C cases, the non-resident supplier is required to register for VAT in Georgia (under a simplified VAT registration scheme), calculate 18% VAT, and remit it to the Georgian tax authorities on a quarterly basis.

VAT Deduction Rules

VAT-registered businesses in Georgia have the right to deduct input VAT paid on goods or services acquired for taxable economic activities. This includes VAT paid to Georgian suppliers, VAT self-assessed under the reverse-charge mechanism for cross-border services, and VAT paid on imports. To qualify for deduction, the goods or services must be used for making VAT-taxable supplies (including exports), and proper documentation — such as a valid VAT invoice or customs declaration — must be maintained. Deductible input VAT can also include capital expenditures, provided they relate to taxable business use.

Personal Income Tax (PIT)

Scope and Rate

PIT General Overview of Georgia’s Tax System

Under the Tax Code of Georgia, individuals—both residents and non-residents—are subject to Personal Income Tax (PIT) only on their Georgian-source income. The standard PIT rate is a flat 20%, and it applies to most types of income, including employment income, rental income, business profits, and directors’ fees. Non-residents are taxed only on income that arises from Georgian sources, such as salaries earned for work physically performed in Georgia or income derived from Georgian property.

While Georgia does not have a broad-based capital gains tax, capital gains derived by individuals from the sale of certain assets may still be taxed. Notably, if an individual sells real estate or a motor vehicle that has been held for less than two years, a 5% capital gains tax applies on the difference between the selling price and the original cost. However, if the asset has been held for more than two years, the capital gain is exempt from taxation. This exemption makes Georgia particularly attractive for individual investors and property owners.

In addition, Georgia offers a preferential small business tax regime for entrepreneurs registered as individual taxpayers. Under this regime, qualifying small businesses may pay a 1% tax on turnover instead of the standard 20% PIT, provided their annual turnover does not exceed GEL 500,000. This simplified taxation model encourages self-employment and small-scale business activity by reducing the tax burden and compliance complexity for individuals operating independently.

Employment Income Definition

Employment income includes any monetary or non-monetary benefit received due to employment. Notable examples include:

Use of a company car for private purposes
Employer-provided accommodation or housing allowance
Reimbursement of personal expenses
Employer-paid insurance premiums

Employers are responsible for withholding PIT at the time of payment or when the benefit is provided.

Pension Fund Contributions

While Georgia does not impose a traditional social security tax, it operates a mandatory funded pension scheme for Georgian citizens and permanent residence permit holders of Georgia. This scheme is governed by the Law of Georgia on Funded Pensions and is mandatory for individuals receiving salary income.

Under this system, a total of 6% of an employee’s gross salary is contributed to their personal pension account: 2% is withheld from the employee, 2% is paid by the employer, and 2% is contributed by the state. Foreign nationals without Georgian citizenship or permanent residency are not subject to this obligation. If applicable, contributions are administered monthly through an electronic system.

Import Tax

Georgia imposes customs duties on imported goods at the rates of 0%, 5%, or 12%, depending on the product category. The tax base is the customs value of the goods (typically CIF value).

Import tax is payable within 5 days of customs clearance, unless otherwise specified.

Excise Tax

Excise tax applies to the import or domestic supply of specific goods, including but not limited to:

Alcoholic beverages
Tobacco products
Petroleum and fuel products
Motor vehicles

The rates vary significantly depending on the product type and are determined under Articles 188 and 188¹ of the Tax Code of Georgia.

Excise tax is usually due within 5 days of importation or when the excisable product is released for consumption.

Property Tax

Taxable Property and Rate

Resident legal entities are subject to up to 1% property tax annually on:

Fixed assets
Uninstalled equipment
Investment property
Unfinished constructions

The taxable base is the average annual net book value of the property, but authorities may assess tax based on market value in certain situations.

Individuals (natural persons) may also be subject to property tax if their annual income exceeds GEL 40,000. The tax usually applies to real estate and vehicles that are owned in Georgia. The property tax rate for individuals is determined by local municipalities and may vary between 0.05% and 1% of the market value of the property. The actual rate depends on the location, type, and value of the property.

In practice, individual property owners must file an annual property tax return by November 1 of the following year, with the tax payment due by November 15. The process is fully electronic and managed via the Revenue Service’s online platform.

Land Tax

Legal entities or natural persons owning or using land are subject to a land tax, calculated based on the type and location of land rather than business income.

Georgia’s tax system is notably straightforward, with moderate tax rates, digital administration, and strong support for reinvestment and cross-border trade. These features make it an attractive destination for regional headquarters, holding companies, IT companies, freelancers, and trading hubs.

At Andersen in Georgia, we assist clients with tax compliance, structuring, and planning across all aspects of Georgian taxation. Whether you are looking to expand your operations or need ongoing support, our team is ready to help.

General Overview of Georgia’s Tax System