The tax departments under the MoF are responsible for tax administrative matters in Georgia.
The tax year is the calendar year in Georgia.
The new CIT regime shifts from annual reporting to a monthly reporting practice.
CIT returns should be submitted on monthly basis before the 15th day following the month when the taxable transaction took place. As a result, the quarterly advance payment rule is abolished for companies subject to the new CIT system.
A CIT return should be submitted before 1 April of the year following the reporting period for companies under the old CIT system.
Payment of tax
CIT is due on a monthly basis before the 15th day following the month when the taxable transaction took place for companies working under the new CIT regime.
In case a transaction was taxed with CIT and then the amount (part of the amount) remitted on this transaction was returned back to the taxpayer, the latter may set off and recover a sum of the previously paid CIT in proportion of the returned amount. This, inter alia, relates to:
- If the participation in a foreign entity was disposed of or contribution into the capital of foreign entity was returned.
- When a loan granted was repaid.
Under the old CIT system, CIT is paid in advance in four equal instalments, before 15 May, 15 July, 15 September, and 15 December. The advance instalments are estimated according to the previous year’s annual tax. A taxpayer with no prior-year CIT obligation is not required to make advance payments.
Final payment is due by 1 April of the year following the reporting period. Excess CIT payments may be offset against other tax liabilities.
Tax audit process
There are two types of tax audits: desk tax audit and field audit. The tax audit may be conducted based on the order of the Revenue Service of Georgia. The Revenue Service sends a notice to the taxpayer no less than ten working days before the commencement of the audit. The audit should commence no later than 30 days after receiving such notice by the taxpayer. Normally, the tax audit may last for three months, and may be extended to another two months with the approval of the head of the Revenue Service. The findings should be presented to the taxpayer in the form of a tax act.
Statute of limitations
The statute of limitations is three years in Georgia from 2017. For those taxpayers who decide to increase the loss carryforward to ten years, the statute of limitations is 11 years. The statute of limitations period was six years prior to 2015, five years in 2015, and four years in 2016.
Topics of focus for tax authorities
In recent periods, the tax authorities have become largely focused on transfer pricing issues during tax audits.