Accounting and tax

Tax considerations

Georgia corporate tax

  1. Georgia standard corporate tax 15%. Capital gains tax is also applicable on business income at the standard corporate income tax rate;
  2. The Value Added Tax (VAT) standard rate is 18%. Companies with an annual turnover exceeding US$57,000 must register for VAT and file returns by the 15th of the month following the taxable month;
  3. A 5% withholding tax is applicable on dividends paid to non-resident companies, reducible when a double tax treaty is signed;
  4. Interest payments and royalties are subject to a 5% withholding tax. However, a higher rate of 15% is applicable to companies residing in offshore jurisdictions such as British Virgin Islands, Cayman Islands, Hong Kong, among others;
  5. Companies in Georgia are exempted from taxes including i) capital duty ii) social security contributions iii) payroll tax and iv) branch remittance tax;

Miscellaneous information

  1. Ordinarily, Georgian companies can carry forward business losses for a period of 5 years but can be extended to 10 years through a special application to the tax authorities. Carryback of losses is prohibited;
  2. All companies must register for tax with the Revenue Service of the Ministry of Finance and file annual tax returns by 1st of April of the year following the end of the fiscal year. The authorities allow a deadline extension to a maximum of 3 months;
  3. Georgia has so far concluded 46 double tax treaties with different countries including India, Germany, China, United Kingdom, Singapore, Ireland among others;

Legal and compliance

Company regulation

  • Georgian limited liability companies can be fully foreign owned;
  • All business registered in Georgia have to maintain constantly a legal registered office address within the country;
  • Clients and suppliers from foreign countries can verify the legal standing of a Georgian company by visiting the National Agency of Public Registry. Publicly available information includes i) business name, registered address and legal status; ii) names and details of the company officers and iii) latest submitted annual returns;
  • Limited liability companies and joint stock companies do not require minimum issued share capital before business registration;
  • Annual financial statements for both private and public companies must be filed in accordance with the IFRS.

Labour regulations

  • A written employment contract is mandatory for labour relations longer than 3 months, in a language understood by both the employee and the employer;
  • In Georgia, the period of probation may not exceed six months and must always be accompanied by a written agreement;
  • No minimum wage;
  • The five-day standard working week is fixed at maximum 40 hours. It is mandatory to have at least 12 hours between shifts;
  • All employees working in Georgia are entitled to
    • at least 24 days of paid annual holidays per annum;
    • no less than 15 days unpaid holidays per annum;
    • 15 days of national holidays and;
    • no minimum amount of sick leave;
    • 365 days of maternity leave, of which 180 are paid.
  • Employers are entitled to suspend employment contract with a minimum notice of 30 days in case of i) infringement of contract terms; ii) long-term disability and iii) if work is performed in clear violations to Labour Code or other Georgian Legislation;

Other business regulations

  • Since 1991, Georgia is a member of the World Intellectual Property Organization, which allow foreign businesses to apply for a patent or a trademark and give them same intellectual property protection conferred to Georgia nationals.

External videos

Contact us

For additional information on our accounting and tax services in Georgia, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Seth Ochieng, directly: