Georgia Tax Deductions

1. Corporate Income Tax (CIT) Deductions:

• Business Expenses:
  • Ordinary and necessary business expenses are generally deductible.
    This includes:
    • Salaries and wages.
    • Rent and utilities.  
    • Office supplies.
    • Marketing and advertising costs.
    • Travel expenses (within reasonable limits).
  • It is vital to maintain detailed records with proper documentation.
• Depreciation of Assets:
  • Depreciation of tangible and intangible assets is deductible.  
  • The Revenue Service of Georgia sets depreciation rates and methods.
    It is very important to see the current rules from the Revenue Service of Georgia.
  • Maintain detailed records of asset acquisition and depreciation calculations.
• Interest Expenses:
  • Interest expenses on business loans are generally deductible, provided they are incurred for business purposes.
  • Transfer pricing rules and thin capitalization rules may apply, limiting the deductibility of interest paid to related parties.
  • It is very important to keep all loan agreements.
• Bad Debts:
  • Bad debts can be deducted if they are proven to be irrecoverable.  
  • Adequate documentation is required to support the claim.
• Research and Development (R&D) Expenses:
  • R&D expenses may be deductible, particularly if they contribute to the Georgian economy.
  • It is very important to follow the Revenue Service of Georgia guidance on this matter.
• Contributions to Approved Pension Funds:
  • Employers' contributions to approved pension funds are deductible.
• Donations to Approved Charitable Organizations:
  • Donations to approved charitable organizations within Georgia may be deductible.

2. Personal Income Tax (PIT) Deductions (for individuals involved in Georgian businesses):

• Professional Expenses:
  • Certain professional expenses may be deductible, depending on the individual's status.
• Charitable Donations:
  • Donations to approved charities.
• Pension Contributions:
  • Contributions to approved pension plans.

Important Considerations for Foreign Investors:

• Documentation:
  • Maintain accurate and complete records of all expenses.
  • Documentation is essential to support your deductions.
• Compliance with Revenue Service of Georgia Regulations:
  • Stay updated on the latest regulations and guidelines issued by the Revenue Service of Georgia.
• Tax Treaties:
  • Familiarize yourself with the relevant double taxation treaty between Georgia and your home country.
• Professional Advice:
  • Seek professional tax advice from experts in Georgia to ensure compliance and maximize your deductions.
• Revenue Service of Georgia Guidelines:
  • It is very important to keep up to date with the guidelines published by the Revenue Service of Georgia.

Key Takeaway: