Tax Law Services in Georgia – Tax Regulations

Tax Benefits and Advantages Under Georgian Legislation

• Micro Business Status

  Advantages:

  • Complete exemption from income tax
  • Exemption from the obligation to use cash registers
  • Exemption from the obligation to record income and expenses
  • Exemption from current payments
  • Simplified financial reporting procedure

  Conditions:

  • Micro business status can be granted to an individual registered as a taxpayer (registration as an individual entrepreneur is not mandatory)
  • Your annual income must not exceed 30,000 GEL
  • You must not have hired employees (except family members)
  • You must not be a VAT payer
  • You must independently conduct economic activities permitted for micro business status

• Small Business Status

  Advantages:

  • 1% income tax (for income up to 500,000 GEL)
  • 3% income tax (for income over 500,000 GEL)
  • Simplified accounting
  • Reduced tax reporting

  Conditions:

  • You must be registered as an individual entrepreneur
  • You must not engage in activities prohibited for small business status
  • You must not engage in activities taxed at a fixed rate

• International Company Status

  Advantages:

  • The profit tax rate for an international company is 5 percent
  • Employee salaries are taxed at 5 percent
  • Dividends issued are not taxed at the source, and are not included in the recipient’s gross income
  • Possibility to reduce taxable distributed profit by salaries and research expenses incurred in Georgia
  • Property (except land) intended for or used in permitted activities is exempt from tax

  Conditions:

  • Permitted activities under the status and main income-generating activities must be carried out in Georgia
  • The company must have appropriate human resources with the necessary qualifications and ensure relevant operational expenses
  • The company must have at least 2 years of experience in permitted activities
  • The company cannot be established in a free industrial zone

  In addition to the above, the Tax Code provides for other benefits:

  • Accelerated depreciation possibilities
  • Tax benefits for research and development expenses
  • Possibilities to avoid international double taxation (based on agreements on avoidance of double taxation)