Value-added tax (VAT)
The standard VAT rate is 18% and applies to the sale of all goods and services supplied in Georgia carried out as an economic activity. Goods are considered to be supplied in Georgia if they are transferred in or their shipment originates in Georgia. Services generally are considered to be supplied in Georgia if they are performed in Georgia. However, special rules apply for services relating to immovable property and certain services provided to non-residents.
The export and re-export of goods is exempt from VAT with the right to credit input tax (formerly referred to as zero-rated). VAT-exempt supplies include financial services, goods and services required for oil and gas operations, and medical services.
Reverse-charge VAT applies to services provided to Georgian taxpayers by a non-resident entity.
A VAT payer is a person who is registered or required to be registered as a VAT payer. Any person whose annual taxable turnover exceeds 100,000 Georgian lari (GEL) in any continuous period up to 12 months or who produces or imports excisable goods must register as a VAT payer. In addition, an enterprise that expects to perform one-off taxable transaction of more than GEL 100,000 must also register as a VAT payer no later than the second day after effecting the transaction.
Generally, VAT is chargeable on the supply of goods and services. VAT is also applied on the advances received on goods and services to be supplied. When goods and services are supplied, VAT is charged on the value of provided goods and services reduced by advance payment.
Import tax is levied on goods that cross the economical borders of Georgia (except export). Depending on the types of products, general rates on imported goods are: 0%, 5%, and 12%. Imported cars are taxed at GEL 0.05 multiplied by the volume of the engine, plus 5% of import tax on each additional year of ownership.
Excise tax is levied on specified goods that are produced in Georgia or imported into Georgia. Excise tax generally is calculated with reference to the quantity of goods (e.g. volume, weight) or, in the case of automobiles, on the basis of the engine capacity and vehicle age. Excise tax rate varies from GEL 0.15 to GEL 400 for one unit.
Excise tax applies to the following goods:
- Alcoholic drinks (i.e. GEL 5 per litre of whiskey).
- Condensed natural gas, except for pipeline.
- Oil distillates.
- Goods produced from crude oil.
- Tobacco products.
The export of excisable goods is exempt from excise tax with the right to credit.
Apart from goods, mobile telecommunication services and termination service of international calls in mobile and fixed networks are also subject to excise tax in Georgia.
The applicable excise rate for mobile telecommunication services is 3%.
International calls termination is taxable based on the call duration with the following rates:
- Call termination within mobile network: GEL 0.15 per minute.
- Call termination within fixed network: GEL 0.08 per minute.
Property tax is payable at the rate of 1% on the annual average residual value of fixed assets (except for land) and investment property on the balance sheet as well as on leased out property of Georgian entities or foreign entities with taxable property in Georgia. For immovable property acquired before 2005, the average residual value must be multiplied by a coefficient of between 1.5 and 3, depending on the acquisition date.
The annual land tax rate for agricultural land varies according to the administrative unit and the land quality.
The base tax rate per 1 hectare of agricultural land varies from GEL 5 to GEL 100. The tax is further adjusted by a territorial coefficient of up to 150%, depending on the location.
The base tax rate payable on non-agricultural land is GEL 0.24 per square metre, which is further adjusted by a territorial coefficient not exceeding 150%.
There are no transfer taxes in Georgia.
There are no stamp taxes in Georgia.
Payroll tax in Georgia represents a normal personal income tax (PIT), which is withheld by an employer at the source of payment of salary to an employee at a 20% rate of gross payment.
Social security contributions
There are no social security contributions in Georgia.