At present, the Tax Code of Georgia defines six basic taxes, which are paid by both individuals and legal entities, depending on the content of the tax. Five of these taxes eventually accumulate in the state budget, i. e. they are general state taxes, while one tax is collected in the local self-government budget and is called a local tax.
Taxes in force in Georgia today are:
- Income Tax;
Profit Tax;
Value Added Tax (VAT);
Excise Tax;
Import Duty;
Property Tax.
Income Tax
Income tax (rate: maximum 20%) is the amount payable to the state from the income received by individuals in various forms. According to the current practice in Georgia, the income tax on the income received in the form of salary is mainly in the budget by your employer instead of you. The Tax Code defines the categories of income that are taxed at the standard rate of 20%, non-standard rate or exempt from income tax. For example, standard wage income is taxed at 20%, rental income at 5%, and state payments, such as state scholarships and pensions, are fully exempt from income tax.
Profit Tax
You will be taxed with profit tax (rate: maximum 15%) if you are engaged in economic activity on behalf of a legal entity. The amount you have to pay to the budget will be calculated according to the amount of redistributed profit, expenses not related to economic activity, the value of the items issued free of charge, the amount donated or the representation expenses specified by the Tax Code. The Tax Code of Georgia defines the types of business operating activities that are also taxed with profit tax.
Value Added Tax (VAT)
Value Added Tax (Rate 18%) - VAT is an indirect tax, which is a supplement to the price of goods and / or services rendered and which you, the consumer, pay when purchasing goods and / or services at a price increased by this tax, but the budget is obliged to pay this amount. To a supplier of goods and / or a service provider who is called a VAT payer. According to the Tax Code of Georgia, if the annual turnover of the business is less than 100,000 GEL, registration as a VAT payer is voluntary. If the turnover exceeds this figure, then registration as a taxpayer is mandatory. The Tax Code also defines the list of goods and services that are exempt from VAT. Examples are educational materials, books and magazines.
Excise Tax
Excise tax levies on certain types of products (for example, tobacco products, alcoholic beverages, cars, etc.) such as production, sale, export and import. The Tax Code of Georgia defines the special list of such products, which is subject to excise tax. The amount of the tax rate depends directly on the type of product.
Import Tax
Import tax refers to the goods that cross the customs border of Georgia, ie enter Georgia from another country. This tax applies only to products imported to Georgia and does not apply to exports. Tax rates of the Tax Code of Georgia are determined according to the products.
Property Tax
Property tax is the only local tax among taxes. All other above-mentioned taxes belong to the general state taxes. The property tax rate is no more than 1% of the value of the property. In all cases, the amount of the property tax rate depends on the status of the property owner (natural or legal person), as well as the type of property and the amount of income.