The rise of digital currencies has prompted many countries to update their tax systems. Georgia has become one of the more attractive jurisdictions for crypto investors and blockchain businesses, offering clear rules and several exemptions. The Georgian Tax Code, alongside ministerial rulings, establishes how income from crypto transactions is taxed and under what circumstances exemptions apply.
Taxation of Income from Crypto Assets
The rules for taxing income from crypto assets differ significantly depending on whether the taxpayer is an individual or a legal entity.
For individuals, Georgia’s tax legislation provides an important benefit. Personal income tax applies only to income sourced from Georgia. Since crypto assets have no physical form, are not tied to a specific location, and typically lack an identifiable issuer, transactions involving their exchange are considered to take place in virtual space. As a result, income derived by individuals from the supply or exchange of crypto assets does not qualify as Georgian-source income and is therefore not subject to personal income tax (0% tax rate) in Georgia. This exemption has made the country particularly appealing to crypto traders and digital nomads.
For legal entities, the rules are stricter. Income from the supply of crypto assets is taxable under the general rules of the Georgian Tax Code. Georgia follows the Estonian-style corporate tax model, meaning profits of legal entities are taxed only when distributed. Corporate income tax is levied at 15 % upon distribution, and any dividends paid are subject to a 5 % withholding tax at source. While companies can defer tax by reinvesting their earnings, distributed crypto-related profits will ultimately be taxed.
VAT Treatment of Crypto Transactions
The Georgian Tax Code also clarifies how crypto transactions interact with Value Added Tax (VAT). Since VAT applies only to the supply of goods or services, and crypto assets are treated similarly to monetary funds, the conversion of crypto assets into national or foreign currency does not create a VAT obligation. This treatment ensures that common activities such as buying, selling, or exchanging cryptocurrencies are VAT-free.
Regulation of Virtual Asset Service Providers (VASPs)
Georgia has also introduced a regulatory framework for Virtual Asset Service Providers(VASPs), bringing the country in line with international anti-money laundering standards. Oversight of VASPs falls under the National Bank of Georgia.
A VASP is any business that provides services related to virtual assets on behalf of third parties. These services can include:
- Exchanging crypto assets into national or foreign currency or into other digital assets.
- Facilitating transfers of virtual assets between users.
- Safekeeping or administering wallets and instruments that provide control over digital assets.
- Managing portfolios consisting of virtual assets.
- Operating trading platforms for digital assets.
- Offering loans backed by or denominated in digital assets.
- Conducting initial offerings of tokens or other crypto assets.
Most of these activities may be considered financial operations. Under the Georgian Tax Code, financial operations are exempt from VAT without the right of deduction. This means that while VASPs generally do not charge VAT on their core services, they also cannot claim input VAT credits on related expenses. The Revenue Service has not yet issued detailed interpretive guidance, so some uncertainties remain in practice.
Georgia has also introduced a regulatory framework for Virtual Asset Service Providers (VASPs), bringing the country in line with international anti-money laundering standards. Oversight of VASPs falls under the National Bank of Georgia. For more detailed information on the legal framework, compliance requirements, and registration process for VASPs, see Andersen’s comprehensive guide on Georgia’s Legal Framework for Virtual Asset Services.
Practical Considerations for Investors and Businesses
Georgia’s approach to crypto taxation offers significant advantages, particularly for individuals whose gains remain outside the scope of personal income tax. At the same time, companies dealing in Crypto must carefully structure their activities to manage potential tax obligations upon profit distribution.
For VASPs and blockchain-based startups, the regulatory environment provides legal clarity but also requires strict compliance with licensing and anti-money laundering obligations. As for their tax regime, since official guidance is still developing, businesses should ensure they monitor new regulations and Revenue Service updates.
Georgia has positioned itself as a crypto-friendly jurisdiction by exempting individual crypto gains from taxation, clarifying the VAT treatment of asset exchanges, and implementing a regulatory framework for service providers. While legal entities are taxed upon distribution of profits, the Estonian-style model allows them to defer taxation, making the regime flexible and competitive.
For investors, traders, and fintech entrepreneurs, understanding these rules is crucial to operating efficiently in Georgia’s fast-developing digital asset sector.
About Andersen in Georgia
At Andersen Georgia, we support individuals, businesses, and investors in understanding and complying with Georgia’s tax treatment of crypto assets. From assessing the tax implications of crypto transactions to navigating VAT and corporate income tax rules, our team provides tailored advice to ensure compliance and efficiency. We also assist Virtual Asset Service Providers (VASPs) in addressing regulatory requirements and structuring their operations in line with Georgian legislation.
For professional advice on the taxation of crypto assets in Georgia, contact us at tax@ge.andersen.com.
Note: This article is based on Georgian legislation and publicly available information as of September 2025. It is intended for informational purposes only and does not constitute legal or tax advice. Readers should seek professional guidance tailored to their specific circumstances before making any decisions based on the information herein.