Tax dispute resolution is a critically important process, where the outcome is often determined long before the case reaches the courtroom. A proper preliminary assessment of the disputed issue is a key success factor, as it allows the taxpayer to form realistic expectations, identify risks early, and prepare a well-structured defense strategy.
For this reason, it is advisable to involve qualified tax and legal advisors already at the audit stage conducted by the Georgian Revenue Service. Timely and active involvement at this stage can significantly reduce potential tax exposures and, in some cases, prevent disputes from escalating altogether.
Where a tax audit identifies unpaid or underpaid taxes, the Revenue Service assesses additional liabilities, penalties, and late payment interest. If the taxpayer disagrees with such an assessment, the dispute may proceed through several stages.
Dispute at the Revenue Service
The first stage of the dispute takes place within the Georgian Revenue Service. The taxpayer has 30 days from receipt of the tax assessment to file a complaint.
At this stage, it is essential to go beyond a purely technical review of the tax calculations. While accounting expertise is highly valuable in understanding the underlying transactions and tax reporting, an effective dispute strategy also requires careful consideration of legal arguments, procedural aspects, and potential litigation risks.
The dispute process at the Revenue Service typically takes around 30 days and may involve a hearing before the dispute resolution board. The positions taken and arguments raised at this stage often shape the entire future course of the dispute, including any future court proceedings.
Dispute at the Dispute Resolution Council of the Ministry of Finance
If the Revenue Service does not fully or partially satisfy the taxpayer’s claim, the dispute may be escalated to the Dispute Resolution Council of the Ministry of Finance of Georgia. The appeal must be filed within 20 calendar days from receipt of the Revenue Service decision.
This stage is particularly important from a strategic perspective. The Council may uphold, amend, or return the case to the Revenue Service for reconsideration. In practice, taxpayers and their representatives are typically invited to an online hearing, where they can present their arguments and respond to questions.
A well-prepared case at this level should not only address the substance of the tax assessment but also reflect a clear and consistent legal position that can be sustained in potential court proceedings.
Court Proceedings
If the dispute is not resolved at the administrative level, the taxpayer may apply to the court within 20 calendar days from receipt of the Dispute Resolution Council’s decision. The case is first heard by the court of first instance and may subsequently be appealed to the Court of Appeals and ultimately to the Supreme Court of Georgia.
Court proceedings require a structured legal approach, including proper formulation of claims, admissibility of evidence, and alignment with established judicial practice.
Importantly, certain arguments, evidence, or procedural issues that were not properly raised during the earlier stages of the dispute may be difficult, or in some cases impossible, to introduce at the court stage. This is why disputes should be managed from the outset with a clear understanding that they may ultimately be litigated.
In practice, legal counsel is often involved only once the case reaches the court. However, this approach may limit the effectiveness of the defense, as earlier stages play a decisive role in shaping the legal and factual framework of the dispute. A coordinated approach from the beginning significantly strengthens the taxpayer’s position.
Integrated Approach to Tax Disputes
Tax disputes inherently combine elements of accounting, tax law, and procedural law. While accounting expertise is essential for analysing financial data and tax calculations, complex disputes, particularly those involving international taxation, transfer pricing, or the interpretation of double tax treaties, require a broader legal perspective.
An effective strategy, therefore, involves integrating accounting and legal expertise from the early stages of the process. This ensures that both the technical and legal aspects of the case are addressed consistently and that the taxpayer’s position remains robust throughout all stages of the dispute.
Disputes Related to “Straw Man of a Taxpayer” and Alter Ego Cases
We provide specialized services in disputes involving so-called “straw man of a taxpayer” structures and alter ego cases, where the tax authorities seek to recover tax liabilities from third parties.
These cases require careful analysis of factual circumstances, legal relationships, and court practice. Our team develops comprehensive defense strategies, gathers supporting evidence, and prepares well-grounded legal arguments to protect our clients’ interests at every stage.
Tax Agreement
Georgian legislation also allows taxpayers to enter into a tax agreement with the Revenue Service.
Such agreements may provide for a reduction of assessed liabilities and/or the deferral of payment over an extended period. Deciding whether to pursue a tax agreement or continue a dispute requires a balanced assessment of the legal position, financial exposure, and likelihood of success in litigation.
A well-informed approach at this stage is essential to achieving an optimal outcome.
Disclaimer: This article is based on Georgian legislation and public information as of March 2026. 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 taking action based on this information.