The Georgian VAT system is largely harmonised with the principles established under the EU VAT Directive, ensuring alignment with international best practices and reinforcing the transparency of the Georgian tax framework. Value Added Tax (VAT) in Georgia is a consumption-based tax, meaning that taxation is linked to the place where goods or services are consumed rather than where they are produced. As part of the broader Georgia business tax environment, VAT plays a central role in the structure of taxes in Georgia, alongside Georgian corporate income tax and Georgian income tax.
The rules governing VAT registration, compliance, and deregistration are primarily regulated by the Tax Code of Georgia, which establishes the obligations of taxable persons and defines the thresholds triggering registration.
Mandatory VAT Registration Threshold
Under Georgian tax legislation, a taxable person is required to register for VAT once the total amount of VAT-taxable supplies of goods and/or services carried out during any continuous 12 calendar months exceeds GEL 100,000. The obligation to apply for VAT registration arises from the moment this threshold is exceeded, and the person must apply to the Georgian tax authority no later than two working days from that date.
For VAT purposes, not all income is counted toward the GEL 100,000 threshold. Under the standard rule, the turnover includes income received from VAT-taxable supplies of goods and services. However, when calculating the total amount of taxable operations, VAT-exempt supplies are generally excluded, except in specific cases. These exceptions include export revenues, certain VAT-exempt financial or real estate-related transactions, and some operations exempt with the right to credit input VAT.
Cases of Mandatory Registration Without the GEL 100,000 Threshold
In certain circumstances, VAT registration may be required irrespective of whether the GEL 100,000 threshold has been reached.
For example, a person engaged in the supply of excisable goods must register as a VAT payer regardless of turnover. Additionally, an entity created as a result of reorganization is required to apply for VAT registration if any party to the reorganisation was already registered as a VAT payer.
Furthermore, if an enterprise or partnership receives goods or services as a contribution from a partner or member who is registered as a VAT payer, the receiving entity must also apply for VAT registration.
These rules reflect the structured and systematic approach of the Tax Code of Georgia in maintaining VAT neutrality and ensuring consistent tax compliance within the Georgia tax system.
Voluntary VAT Registration
A person may also choose to register voluntarily as a VAT payer. In this case, the person is considered a VAT payer from the date of application to the tax authority.
Voluntary registration is often pursued to obtain qualified VAT payer status and to secure the right to deduct input VAT paid on purchases.
VAT Deregistration
VAT registration may be cancelled when certain statutory conditions are satisfied.
If, during a continuous 12 calendar-month period, a registered person’s taxable turnover falls below the GEL 100,000 threshold, the person may apply to the Revenue Service for cancellation of VAT registration. The Revenue Service may also cancel VAT registration with the consent of the taxpayer.
Registration is automatically cancelled in specific situations, including:
- upon liquidation of an enterprise or organisation, effective from the date of cancellation of registration in the state or business registry;
- upon the death of a natural person, effective from the date of death;
- upon the opening of bankruptcy proceedings, effective from the publication of the court ruling recognising insolvency and opening bankruptcy proceedings.
These rules ensure clarity and legal certainty within the VAT framework and support the orderly administration of taxes in Georgia.
VAT compliance rules
Compliance with VAT obligations forms a critical component of the broader Georgia tax system and requires strict adherence to statutory deadlines and procedural rules established under the Tax Code of Georgia.
The VAT reporting period in Georgia is the calendar month. A person registered as a VAT payer is required to submit a VAT return to the tax authority no later than the 15th day of the month following the reporting period. Payment of the VAT liability must also be made within the same deadline. These requirements apply uniformly to all registered taxable persons and are administered through the electronic systems of the Georgian Revenue Service.
In cases involving insolvency proceedings, additional compliance obligations arise. A VAT-registered person is required, within 15 days from the date on which the court ruling recognising insolvency and opening bankruptcy proceedings becomes legally effective under the Law of Georgia on Rehabilitation and Collective Satisfaction of Creditors, to submit all outstanding VAT declarations for the full or partial tax periods preceding the opening of the bankruptcy regime.
As noted above, to obtain the right to deduct input VAT paid on purchases, a person must acquire qualified VAT payer status. The process is fully electronic and is carried out via the official portal of the Revenue Service, where the taxpayer may submit a request for qualified status.
Importantly, to claim input VAT deduction, the taxable person must already be registered as a VAT payer at the moment the VAT-taxable transaction is carried out. Only in such a case, following the granting of qualified status, may the taxpayer exercise the right to deduct VAT previously paid. This requirement underscores the importance of timely VAT registration and tax compliance in Georgia.
Disclaimer: This article is based on Georgian legislation and publicly available information as of February 2026 and is intended for informational purposes only. It does not constitute legal or tax advice.