Verified Facts
The tax rates in Georgia range from 0% to 20% for personal income tax, with a corporate tax rate of 15% and a standard VAT rate of 18%, making it a relatively tax-friendly country for expats and businesses.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Georgia has a territorial tax system, meaning that individuals and companies are taxed only on their Georgian-sourced income. This system is beneficial for expats and foreign workers who do not have worldwide income. Residency rules for tax purposes in Georgia are based on the number of days spent in the country, with individuals considered tax residents if they spend at least 183 days in a calendar year in Georgia. Non-residents are taxed only on their Georgian-sourced income, while residents are taxed on their worldwide income, but with the possibility of claiming foreign tax credits.
The country's tax authority, the Revenue Service, is responsible for administering taxes and providing guidance to taxpayers. Georgia has a relatively simple tax system, with a focus on encouraging foreign investment and economic growth. The country has a network of double taxation treaties with 54 countries, which helps to reduce the tax burden on individuals and companies with international income. Overall, Georgia's tax system is designed to be business-friendly and attractive to foreign investors.
Personal Income Tax
| Income Bracket (GEL) | Tax Rate |
|---|---|
| 0 - 45,000 | 0% |
| 45,001 - 90,000 | 10% |
| 90,001 - 120,000 | 15% |
| 120,001 - 150,000 | 18% |
| 150,001 and above | 20% |
Personal income tax in Georgia is relatively low, with a top rate of 20%. Taxpayers are allowed to claim deductions for certain expenses, such as mortgage interest and charitable donations. The tax authority also provides allowances for dependents and other family members. Filing requirements are straightforward, with taxpayers required to submit their tax returns by the end of March each year. Taxpayers can also claim foreign tax credits for taxes paid on foreign-sourced income.
Corporate & Business Tax
- The corporate tax rate in Georgia is 15%, which is relatively low compared to other countries.
- Small businesses with annual turnover of less than GEL 100,000 are exempt from corporate tax.
- Georgia has several free zones, including the Kutaisi Free Industrial Zone and the Poti Free Industrial Zone, which offer tax exemptions and other incentives to businesses.
- Companies are required to register with the tax authority and obtain a tax identification number within 30 days of establishment.
- Businesses are also required to maintain accounting records and file tax returns on a quarterly basis.
VAT / Sales Tax
- The standard VAT rate in Georgia is 18%, which applies to most goods and services.
- A reduced VAT rate of 0% applies to certain goods and services, such as basic foodstuffs, medicines, and educational services.
- Exemptions from VAT are available for certain activities, such as financial services and real estate transactions.
- Georgia has a tourist refund scheme, which allows foreign tourists to claim a refund of VAT paid on certain goods and services.
For Expats & Foreign Workers
- Expats and foreign workers are considered tax residents in Georgia if they spend at least 183 days in a calendar year in the country.
- Tax residency rules are based on the number of days spent in the country, rather than the individual's nationality or domicile.
- Georgia has double taxation treaties with 54 countries, which helps to reduce the tax burden on individuals and companies with international income.
- Expats and foreign workers are required to register with the tax authority and obtain a tax identification number.
- Social security contributions are mandatory for all employees, including expats and foreign workers.
- Remittance rules are relatively straightforward, with individuals allowed to remit funds abroad without restriction.
Crypto & Investment Income
- Investment income, including dividends and interest, is subject to a withholding tax of 5%.
- Capital gains tax is levied at a rate of 5%, or is included in income tax at the individual's marginal rate.
- Cryptocurrency is considered a virtual currency and is subject to income tax and capital gains tax.
- Taxpayers are required to declare their cryptocurrency holdings and transactions on their tax returns.
- The tax authority has issued guidance on the taxation of cryptocurrency, which provides clarity on the tax treatment of this type of income.