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One of the advantages of Georgian tax legislation for the Information Technology sector, both for local and foreigners, is the avaibility of a special status. The "Virtual Zone Entity" is a legal entity operating in the field of Information Technology to which the Georgian tax administration has granted a special status: Profits generated by a VZE from the sale of IT services outside Georgia are exempt from Tax.
Among the many industrial sectors that are doing well in the global economy, information technology is certainly at the top. Information technology has become one of the most favourable sectors for creating jobs and making profits. However, the sector also needs incentives and a level playing field to be competitive at the highest degree. This is what Georgia offers in the form of Virtual Zones.
The development of the Internet has opened up many opportunities for companies. And among these, software companies are in pole position. Software export is the main source of revenue for a large number of IT companies operating worldwide. There is one country that does not levy taxes on the income of IT companies, namely Georgia in the Caucasus.
The status of Virtual Zone is a legal entity in Georgia and is similar to the Industrial Free Zones regime in Georgia. The status of virtual zone offers many tax incentives but these are reserved for IT companies. The main tax advantage is the absence of taxes on income from the export of computer services and products such as software.
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