Taxes and duties in Georgia

Overview of taxation in Georgia

Modification date: 2023-07-26 / View count: 3251

Taxes in Georgia

The tax system in Georgia is interesting for both companies and individuals. Below are some of the main points that may interest you.

Company tax

  • Companies registered in Georgia are subject to a unique tax of 15% on their profits. But, if the profits are reinvested in the company, the tax will be 0%.
  • Interest, dividends and royalties are subject to a 5% tax.
  • Professional fees are subject to a 10% deduction. If the recipient is a company resident in a proven tax haven, a withholding tax of 15% may apply.
  • Beneficiaries of dividends from resident and non-resident entities are not considered profits and are consequently not taxable unless they come from a jurisdiction considered a tax haven.
  • The base of the corporate income tax includes capital income.
  • There is no minimum capital. And there is rules on the Control of Foreign Companies.
  • The property tax is progressive. It cannot exceed 1% of the average residual value of fixed assets, investment properties and buildings in progress.
  • There are no employer contributions, no social security contributions on salaries, stamp duty, inheritance tax and wealth tax.
  • Its average custom duty rate is the lowest of all WTO countries at 1.5%.
  • The VAT is 18%.

In addition, there are even more attractive tax incentives in the so-called Free Industrial Zone (FIZ) areas. Companies incorporated in these FIZs are exempt from corporation tax, import and export taxes, dividend taxes, VAT and property taxes. The only applicable tax is 4% on transactions between these free industrial zones and Georgian territory.

Income Tax

  • Tax residents are taxed only on their Georgian-source income. It means that income earned abroad is not subject to Georgian tax.
  • The flat tax rate is 20%. Although Dividends, Royalties and Interest Income are taxed at 5% withholding tax, they are not included in the personal tax base.

Property Tax

  • Rental income from residential properties is also subject to a reduced tax rate of 5%.
  • The sale of a residential property is subject to a reduced tax rate of 5%.

Individuals who own real estate are subject to a property tax ranging from 0.8% to 1% of the property market value. However, Households whose annual income is less than 40.000 GEL (16.500 USD) are exempt. Those whose yearly income is between 40,000 and 100,000 GEL (41.200 USD) are subject to a reduced tax rate of 0.05% to 0.2% of the property value.

For the latest tax rates and policies, visit the Revenue Service website in Tbilisi, Georgia. 

Article written by : BGG Press Office
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