Georgia VAT

1. Standard VAT Rate:

• Georgia applies a standard VAT rate of 18% on most goods and services.

2. VAT Registration:

• Mandatory Registration:
  • Businesses with taxable supplies exceeding GEL 100,000 within any consecutive 12-month period must register for VAT.
  • Foreign businesses conducting taxable activities in Georgia are also required to register if they meet this threshold.
• Voluntary Registration:
  • Businesses with taxable supplies below the threshold can choose to register voluntarily.
• Registration Process:
  • Registration is done through the Revenue Service of Georgia.

3. VAT on Imports and Exports:

• Imports:
  • Imports of goods into Georgia are subject to import VAT.
• Exports:
  • Exports of goods and certain services from Georgia are generally zero-rated.

4. Input VAT Recovery:

• Deductibility:
  • Businesses registered for VAT can deduct input VAT incurred on purchases related to their taxable supplies.
  • Specific rules and conditions apply to input VAT deductions.
• Refunds:
  • If the input VAT exceeds the output VAT, businesses can claim a VAT refund from the Revenue Service of Georgia.

5. Reverse Charge Mechanism:

• Application:
  • The reverse charge mechanism may apply to certain transactions, particularly those involving services provided by non-residents.
  • In these cases, the recipient of the services is responsible for accounting for the VAT.

6. VAT Returns and Payment:

• Monthly Returns:
  • VAT returns are filed monthly.
• Electronic Filing:
  • Electronic filing is mandatory.
• Payment Deadlines:
  • VAT payments are due by the deadlines specified by the Revenue Service of Georgia.

7. Important Considerations for Foreign Investors:

• Revenue Service of Georgia:
  • The Revenue Service of Georgia is the primary authority for VAT matters.
• Accurate Record-Keeping:
  • Maintain detailed records of all VAT transactions.
• Compliance:
  • Ensure compliance with all VAT regulations and deadlines.
• Professional Advice:
  • Seek professional VAT advice to ensure compliance and avoid penalties.

Key Takeaway: