VAT in Georgia: The Practical Guide for Foreign Businesses
Georgian value added tax (VAT) is structured along principles close to those of European Directive 2006/112/EC, to which it has aligned since the 2021 reforms. For businesses familiar with the European system, the framework will be largely familiar.
Rate and Registration Threshold
The standard rate is 18%, uniform — no reduced rate. Registration is mandatory once taxable turnover exceeds 100,000 GEL over any consecutive 12-month period. Registration must be requested no later than the second day following the crossing of this threshold.
Voluntary registration is possible at any time, which can be strategic to recover input VAT from the outset of business.
Who Is Liable?
Any person who, independently, carries out an economic activity in any location, regardless of purpose or result, including:
• Persons registered for VAT
• Persons making taxable imports
• Non-residents providing services in Georgia without registering there (via reverse charge)
Taxable Transactions
VAT applies to all supplies of goods and services carried out in Georgia for consideration, as well as imports. Gratuitous supplies are also taxable in certain cases (if input VAT has been deducted).
Place of supply: For B2B, the service is deemed supplied where the customer is established. For B2C, where the supplier is established. Services related to real estate follow the location of the property.
Exempt Transactions Without Right to Deduction (Examples)
• Financial services
• Insurance and reinsurance services
• Imports of currencies or securities
• Urban and inter-regional transport at regulated fares
• Medical and personal care services
• Educational services provided by schools
• Books, newspapers, magazines, and sheet music
• Land
• Transactions between companies in the same Free Industrial Zone
Exempt Transactions With Right to Deduction (0% Rate)
• Exports of goods
• International maritime and air transport
• Supply of services to embassies
• Tour operators bringing foreign tourists to Georgia
• Delivery of medicines manufactured in Georgia (list defined by decree)
• Domestic air transport within Georgian territory
VAT on Digital Services
Since October 2021, foreign providers of digital services (SaaS, streaming, hosting, online advertising) to Georgian consumers (B2C) are required to register for VAT in Georgia and charge 18% on these services. This obligation applies if at least one of the following criteria is met: payment financial institution in Georgia, Georgian IP address, Georgian telephone code. A simplified online registration procedure is available for non-residents.
Reverse Charge
When a non-resident not established in Georgia provides services to a Georgian taxable person, VAT is self-assessed by the recipient. The recipient can simultaneously deduct this self-assessed VAT, making the transaction cash-flow neutral.
Filing and Payment
VAT returns are filed monthly, before the 15th of the month following the reference period. Net collected VAT (output minus input) is paid on the same date. If deductible VAT (input) exceeds collected VAT, a refund may be requested — and may be processed automatically by the Revenue Service's analytical system.
VAT Refund to Foreign Travellers (Tax Free)
Foreign tourists can obtain a refund of VAT paid on their purchases in Georgia upon departure, provided that the purchase was made within the preceding 3 months, the goods leave Georgian territory, and the receipt value exceeds 200 GEL (excluding VAT).
Refund to EU VAT-Registered Businesses
A business established in an EU Member State can obtain a refund of VAT paid in Georgia on its purchases or imports (excluding real estate), provided it is not established there and uses the goods/services for taxable transactions in its Member State.