Amendments to the Tax Code of Georgia – VAT reform

VAT reform

The Georgian Tax Code of 2010 has been recently amended to adopt a new VAT system. The amendments are part of a major recent reform aimed at eliminating shortcomings in the Tax Code in respect of taxation and tax administration.

The amendment echoes obligations taken on by Georgia within the scope of the Association Agreement between EU and Georgia, which, among others, aims to harmonize the Georgian Tax legislation with the EU Directive 2006/112/EC on the Common System of Value Added Tax (the VAT Directive). While positively affecting the taxpayers, the new VAT system introduced new regulatory provisions and altered the core principles of the VAT application, as further detailed below. The amendments came into force from 1 January 2021.