Georgia enjoys low tax rates, a transparent tax system, and legislation that unifies taxes and customs under one code. Currently, there are only 6 flat taxes in Georgia:
From January 2017, retained or reinvested profits are exempted from the profit tax, meaning that profit tax applies only to distributed profit.
Collection of taxes and supervision of the tax environment is provided by the Georgia Revenue Service. All tax administration procedures and customs clearances are web-based and can be managed online.
According to the Economic Liberty Act, Government is not allowed to increase national tax rates (except excise tax) or number of taxes without national referendum.
Georgia does not have payroll, social security, capital gains, wealth or inheritance tax. The Tax Code of Georgia allows companies to use accelerated depreciation on capital assets, including full deductions during the first year. Losses carry forward for corporate profit tax purposes for 10 years. Personal income tax applicable to interest, dividends and royalties is set at 5%.
Georgia has Double Taxation Avoidance Treaties with 55 countries, does not have restrictions on currency convertibility or repatriation of capital & profit, and property taxes are handled locally. All other taxes are handled on a national basis.
Emphasizing the simplicity and reliability of the Georgian tax system, the Global Corruption Barometer of Transparency International stated there were no occurances of bribery within Georgia’s tax administration. The World Economic Forum’s Global Competitiveness Report ranked Georgia 8th among low tax rate economies.
Currently four Free Industrial Zones (FIZs) operate in Georgia in the following cities: Poti (sea port), Kutaisi (third largest city) and Tbilisi (capital city). Businesses registered in Free Industrial Zones benefit from certain tax exemptions:
If a company produces goods for export in FIZ, it is exempt from all taxes except Personal Income Tax (20%), which is paid from employees’ salaries.
If a company imports products from FIZ to other territory of Georgia, in addition to Personal Income Tax, it has to pay VAT and 4% of revenue from national sales.
All Free Industrial Zones (FIZs) are operated by private companies and investor should rent a space from FIZ operator:
Poti FIZ is operated by Rakia Georgia FIZ LLC
Kutaisi FIZ #1 is operated by Georgia International Holding (LLC Fresh Georgia)
Kutaisi FIZ #2 is operated by Hualing Group
Tbilisi FIZ is operated by Tbilisi Free Zone JSC (subsidiary of BitFury Group)
According to Tax Code of Georgia, if a company produces goods intended for export market, it can apply for a license about “Internal Processing Regime” to the Ministry of Finance. This license will grant the company a right to import raw materials without paying import/customs tax and VAT on these materials. The Company only has to present a bank warranty (amount of bank warranty is sum of import tax and VAT). After the processing of goods, in case the end product is exported, bank warranty is released. If some of the end products will be sold in the territory of Georgia, the company will have to pay import and VAT of raw materials which were used to make those goods.
