Tax Planning in Georgia - Consultancy Services for Individuals and Companies
Tax Planning in Georgia
Updated on Tuesday 21st February 2023
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Tax planning in Georgia is a service that is available for both individuals and companies, regardless if they represent resident entities or foreigners. Through this, any person arriving here is informed on the overall tax regime that has to be applied.
At the same time, tax planning is a way through which one can find various legal options to reduce the overall tax burden, but this is generally not the case of Georgia, as the country applies a simple tax system, with reduced rates.
Our team of lawyers in Georgia can provide tax planning, which is a component of the tax consultancy services available for foreigners, amongst numerous other types of legal services.
When is tax planning in Georgia recommended?
Requesting the services of our team of Georgian lawyers, who advise on tax planning, is recommended especially for foreigners who have a connection of some sort with this country.
The service is recommended for persons who will relocate here for a limited amount of time for employment purposes, or for those who want to become long-term residents.
Of course, it highly recommended to all foreign investors who want to open a company in Georgia, as the corporate tax system is much more complex compared to the one applied to natural persons.
When we refer to tax planning in Georgia, one must know that the country charges 6 basic taxes: 1) the corporate income tax, 2) the personal income tax, 3) the property tax, 4) VAT, 5) excise tax and 6) import tax.
In the case in which you want to buy a house in Georgia, you will be required to pay a property tax, which is one of the main taxes applicable here.
The property tax for residential units varies between 0% and 1%, based on the income of the household, while for companies, the property tax is generally charged at a rate of 1%, although lower thresholds can apply (for leasing companies, it is charged at a rate of 0.6%).
When will tax obligations appear for foreigners in Georgia?
If we refer to natural persons who are foreigners and who come to live in Georgia for a given purpose, tax liabilities can appear after living here for a period of 183 days in a row.
In the case in which the duration of the stay is longer than this, we advise you to request information on tax planning in Georgia, as you will definitely have various tax obligations.
For instance, in the case in which a foreigner will stay here for minimum 183 days, the person is required to file a tax declaration by March 31st of the following year.
It is also important to be aware that once you overstay this number of days in a period of 12 months (calculated from the 1st day of arrival in Georgia), you will have tax obligations.
Our law firm in Georgia can present the documents you have to submit and the institutions where such papers have to be sent.
What are the main Georgian tax rates?
As said earlier, Georgia has a simple tax system. If you want to have an image on the tax obligations you can have throughout a financial year, we invite you to read the following list:
- the personal income tax is charged at the standard rate of 20%, regardless of the level of income (and it is applied only to the income obtained in Georgia);
- the standard VAT is charged at a rate of 18%;
- the corporate income tax is applied at a rate of 15%;
- the tax on property is charged at a rate of maximum 1% from the value of the property;
- the withholding tax charged on interest and dividends obtained from Georgian sources is applied at a rate of 5%.
Tax planning in Georgia for companies
Tax planning in Georgia is a crucial method that must be used when developing a business activity, as through this method the investors can observe the taxes due and the current financial situation of the company.
The purpose of tax planning is to observe the mechanisms through which companies can reduce their level of taxation and this can be achieved with the help of our law firm in Georgia.
The method can analyze the company’s sales, investments, cash-flow or discovering the most advantageous saving methods. For more details on tax planning services, you can rely on our lawyers in Georgia. We can also put you in touch with our partners in other countries if you need company formation or legal services.
