Taxes

183-Day Rule in Georgia

The 183-day rule in Georgia is the primary statutory mechanism used to establish individual tax residency under Article 34 of the Tax Code of Georgia. An individual becomes a Georgian tax resident for a given calendar year if they spend 183 days or more in Georgia within any consecutive 12-month period ending in that tax year.

Capital Gains Tax on Real Estate in Georgia

Capital gains tax on real estate in Georgia is levied on the net profit realized from property sales. For individual residential owners holding title for more than two continuous years, the capital gains tax rate is 0%. If residential property is sold within a two-year holding period, a reduced 5% tax rate applies to the net gain. Commercial assets and corporate entities follow distinct rules.

Corporate Income Tax in Georgia

Corporate Income Tax (CIT) in Georgia is set at a standard rate of 15%, levied exclusively on distributed profits, deemed profit distributions, non-business expenditures, and transfer pricing adjustments. Under the Estonian tax model adopted in 2017, retained earnings and profits reinvested into business operations or capital assets are exempt from corporate tax until distribution.

Dividend Tax in Georgia

Dividend tax in Georgia refers to the statutory withholding tax levied on profit distributions paid by Georgian corporate entities to shareholders. Under Article 130 of the Tax Code of Georgia, the standard dividend tax rate is 5%. This tax is withheld at source by the distributing enterprise, satisfying the tax obligation for resident individual recipients without requiring additional personal income tax filings.

Double Tax Treaty Network (Georgia)

Georgia's Double Tax Treaty (DTA) network comprises bilateral tax agreements signed with over 55 sovereign states to prevent the double taxation of income and capital. Modeled predominantly on the OECD Model Tax Convention, these treaties allocate taxing rights between countries, eliminate or reduce cross-border withholding taxes, and provide tax credit mechanisms for foreign investors.

Georgian Tax ID Number

A Georgian Tax Identification Number (TIN) is a unique numeric code issued by the Revenue Service of Georgia (RS.ge) to individuals and legal entities. It is required for declaring local income, paying property or rental taxes, registering business activities, and conducting formal financial transactions within Georgia.

HNWI Tax Residency Program in Georgia

The Georgian High-Net-Worth Individual (HNWI) Tax Residency Program allows eligible individuals to obtain official Georgian tax residency without fulfilling the standard 183-day physical presence requirement. Applicants must prove assets exceeding GEL 3,000,000 or annual income exceeding GEL 200,000 over three years, combined with a Georgian residence permit or local income.

Individual Entrepreneur in Georgia

An Individual Entrepreneur (IE) in Georgia is a legal business structure for sole traders registered with the National Agency of Public Registry. When granted Small Business Status by the Revenue Service, eligible entrepreneurs pay a 1% tax on gross annual revenue up to 500,000 GEL, making it a prominent tax regime for freelancers and service providers.

Inheritance Tax in Georgia

Georgia does not impose a standalone inheritance or estate tax. Instead, inherited assets are regulated under the Personal Income Tax framework within the Tax Code of Georgia. First- and second-degree relatives enjoy complete exemption from income tax on inherited real estate, while third- and fourth-degree relatives receive exemptions up to statutory thresholds.

Property Tax in Georgia

Property tax in Georgia is an annual local municipal tax levied on real estate assets and land owned by physical individuals and legal entities. For individuals, tax liability and rates—ranging from 0% to 1.0% of property market value—are determined by annual worldwide household income, whereas corporate property tax is capped at 1% of book value.

Rental Income Tax in Georgia

Rental income tax in Georgia is a statutory levy on revenues generated from leasing real estate within the country. Under the Tax Code of Georgia, individual property owners leasing residential real estate solely for dwelling purposes can register for a concessional 5% flat tax rate on gross income without expense deductions. If unregistered, or if leasing commercial property, standard income tax rates of 20% apply.

Small Business Status (1% Tax) in Georgia

Small Business Status in Georgia is a special preferential tax regime for registered Individual Entrepreneurs (IEs) whose annual gross revenue does not exceed 500,000 GEL. It taxes gross turnover at a flat 1% rate instead of the standard 20% personal income tax rate. However, passive real estate rental income is explicitly excluded from this regime.

Tax Residency in Georgia

Tax residency in Georgia determines an individual's or legal entity's tax obligations to the Georgian Revenue Service. An individual becomes a tax resident primarily by spending 183 or more days in Georgia within any consecutive 12-month period, or by qualifying under the High Net Worth Individual (HNWI) program. Georgian tax residents benefit from a territorial tax regime on foreign-source personal income.

VAT on Property in Georgia

In Georgia, Value Added Tax (VAT) on real estate is levied at a standard rate of 18%. It applies to primary market transactions where a property is sold by a developer or corporate entity. By law, the 18% VAT is always included in the developer's advertised price. Transactions on the secondary market between private individuals are exempt from VAT.

VAT Refund on New-Build Property in Georgia

A VAT refund on new-build property in Georgia refers to the mechanism by which VAT-registered business entities offset or reclaim the 18% Value Added Tax included in the purchase price of real estate. While individual private buyers of residential property cannot recover this tax, legal entities operating taxable commercial activities can claim input VAT recovery through Georgia's automated Revenue Service system.

Withholding Tax in Georgia

Withholding tax in Georgia is a mechanism where a Georgian paying entity (tax agent) deducts tax at the source before disbursing payments to non-residents or individuals. Standard rates include 5% on dividends, interest, and qualifying residential rental income, and 10% on royalties and cross-border management or consulting services provided by non-residents without a permanent establishment.