Tax rate by region Georgia

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Georgia implemented a Value Added Tax (VAT) system in 2000 to modernize its tax administration and improve revenue collection. This system applies to all goods and services sold within the country, including SaaS products. The standard VAT rate in Georgia is 18%, making it crucial for businesses to understand their compliance obligations to avoid any penalties or fines. While Georgia does not have any specific exemptions for digital goods and services, some specific categories of products or services may be subject to a reduced VAT rate of 0.0%.

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Georgia

Georgia implemented a VAT system in 2000 to modernize its tax administration and improve revenue collection.

Official government link: Revenue Service

18.00%

E-products and services VAT/Sales tax rate

0.00%

Reduced tax rate

Reduced tax rate product categories

Digital services are generally subjected to the standard VAT rate of 18%. There are currently no specific reduced rates for digital goods and services.

Exempted product categories

Georgia does not have any specific exemptions for digital goods and services.

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

A non-resident company must register when providing taxable supplies in Georgia.

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

In order to register, it is necessary to complete a specific form called “Registration form of a foreign taxpayer” available on the Georgian Revenue Service’s website.

The form requires certain details about your company, such as:

– The country where the company is incorporated for tax purposes;
– The code and description of the company’s activities;
– The tax identification number of the country where the company is established.

Once you have filled out and submitted this form, the Georgian Tax Service will provide instructions to registered digital companies on how to proceed with VAT report submissions.

List of digital and electronic services liable for tax

Online services such as website and webpage hosting, remote maintenance of programs, systems administration, and data warehousing. It also covers the supply of on-demand disc space, software downloads and updates, banner ad blockers, drivers, and automated installations of filters and firewalls. Additionally, it includes accessing or downloading desktop themes, images, screensavers, digitized books, online publications, newspapers, journals, weblogs, and website statistics. Other services are online news, traffic, weather reports, real-time financial data, advertising space, search engines, music, jingles, ringtones, films, games, automated online games, and streaming radio or TV programs on demand.

Penalties

If you don’t meet the deadline set by Georgia’s tax laws for submitting your tax return or tax calculation, penalties apply. Here’s how it works:

If you’re up to 2 months late, you’ll be fined 5% of the tax due based on your return. However, the total fine for the entire delay period can’t exceed 30% of the tax due.
If you’re more than 2 months late, the fine increases to 10% of the tax due based on your return or tax calculation.
If your tax return or tax calculation shows that you owe no tax (zero), then no fine is imposed under this rule.

Registration threshold

No threshold specified

Filing interval

Quarterly for non-resident digital service providers

Filing deadline

The 20th day of the month following the reporting period.

E-invoicing requirements

Not specified

Record keeping

Maintain your accounting records for a period of three years following the end of the year in which the service was provided. This is necessary to verify the correctness of your tax liability.

How-To Guides: Georgia SaaS VAT

Step: 1 Threshold

Effective October 1, 2021, Georgia requires non-resident vendors of digital services to consumers (B2C) in Georgia to register for and collect VAT, regardless of the sales amount.

Step: 2 Business Registration

Managed by the Revenue Service of Georgia (RS). Non-residents must register via the dedicated electronic portal: VAT Portal on Digital Services.

Step: 3 TIN/VAT Number

A simplified VAT Identification Number is issued by the Revenue Service upon successful electronic registration.

Step: 1  Standard VAT Rate

Standard VAT rate in Georgia is 18%.

Step: 2 Determine if you need to register.

To calculate your tax amounts, use the following formula:

 

Tax Amount = Net Price x 18%

Step: 3 Reverse Charge (B2B)

If the recipient is a Georgian VAT-registered business, the Reverse Charge Mechanism applies. The non-resident supplier does not register or charge VAT; the Georgian business must self-assess and pay the 18% tax locally.

Step: 1 Selling B2C

The non-resident provider must charge 18% VAT on all sales to non-taxable natural persons located in Georgia. Location is determined by IP address, bank account country, or phone code.

Step: 2 Selling B2B

If the customer provides a valid Georgian Tax ID, no VAT is collected by the seller. The invoice should state that the transaction is subject to the Reverse Charge.

Step: 3 Invoice Requirements

Invoices must include:

  • Supplier Name & Address
  • Simplified VAT ID
  • Buyer Details, Date of Issue
  • Sequential Invoice Number
  • Description of Services
  • Currency (GEL, USD, or EUR)
  • Tax Amount.

Step: 1 Filing Interval

Taxes must be filed quarterly (Reporting periods: Jan-Mar, Apr-Jun, Jul-Sep, Oct-Dec).

Step: 2 Filing Deadline

Taxes must be filed by the 20th day of the month following the end of the quarter (e.g., April 20th for Q1).

Step: 3 Submission

Returns are filed electronically via the nr.rs.ge portal. Payments can be made in USD, EUR, or GEL via SWIFT transfer by the last day of the filing month.

Step: 4 Record Keeping

Records must be maintained for 3 years from the end of the year the service was provided.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Georgia’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

Overwhelmed by SaaS sales tax compliance?

Our team of SaaS tax experts is here to help. Contact us today for a free consultation. 

 

 

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