Georgia’s Tax System: A Guide for Expats, Entrepreneurs, and Investors
Georgia is renowned for its simple, low-tax regime, ranked by the World Bank as the third-lowest tax burden globally, with total taxes accounting for just 9.9% of profits. This guide provides a comprehensive overview of key taxes, incentives, and practical tips for expats.
1. Corporate Income Tax (CIT)
Rate: 15% on distributed profits (retained profits are tax-free).
Case: If a company earns GEL 1 million and reinvests it, no tax is due. If dividends of GEL 500,000 are paid, CIT of GEL 75,000 applies.
2. Personal Income Tax (PIT)
Rate: 20% on salaries/business income; 5% on dividends, interest, and royalties.
Residency: Tax residents (183+ days/year) are exempt on foreign-source income.
Case: An expat earning GEL 10,000/month nets GEL 8,000 after 20% PIT.
3. Value Added Tax (VAT)
Rate: 18%.
Threshold: Mandatory registration if annual taxable turnover exceeds GEL 100,000.
Export: Services to non-residents are often VAT-free.
4. Dividend Tax
Rate: 5% withholding tax on dividends to individuals.
Exemption: Dividends between Georgian companies are tax-free.
5. Property Tax
Rate: Progressive 0.05%–1% on property value, based on family income:
Income ≤ GEL 40,000: exempt (except land tax);
Income > GEL 100,000: up to 1%.
6. Customs Duty
Rates: 0% for 90% of goods; 5% or 12% for certain items (e.g., alcohol).
EVs: Electric vehicles enjoy duty exemptions.
Tax Incentives for Small Businesses
Small Business Status (1% tax): For individuals with turnover ≤ GEL 500,000; tax rate is 1% on revenue.
Micro Business Status (0% tax): For turnover ≤ GEL 30,000 and no employees; income is tax-free.
International Tax Planning
DTAs: Georgia has treaties with 58 countries (e.g., China, EU), reducing withholding taxes.
Non-residents: Subject to 10% withholding on service income; 5% on dividends/interest.
Repatriation: No restrictions on profit remittance after tax compliance.
Key Considerations for Expats
Plan tax residency to avoid unintended global income reporting.
Monitor VAT registration thresholds.
Transition from micro/small status if revenue grows consistently.
Account for 4% additional tax on goods from free industrial zones sold domestically.
Sources: investingeorgia.org, taxsummaries.pwc.com, Georgia Revenue Service (rs.ge).
First, please LoginComment After ~