Taxes

Is my income from abroad taxed in Georgia: what to do under Georgian law

Whether an individual's income from abroad is subject to income tax in Georgia: the territorial principle, what counts as Georgian-source income, residency, and foreign taxes.

What to do

  1. Territorial principle: the income of a resident individual that is not from a Georgian source is exempt from income tax (Tax Code of Georgia, Art. 82). A non-resident pays only on income from a Georgian source (Art. 79). A resident is someone present in Georgia for 183 or more days in any continuous 12-month period ending in the tax year (Art. 34). For foreign passive income the result is the same: it is not taxed in Georgia.
  2. Source by type of income: dividends have a Georgian source only if paid by a resident legal entity (Art. 104); interest, if the payer is a Georgian resident (Art. 104); pension or scholarship, if paid by a Georgian resident (Art. 104); rent of movable property, if it is used in Georgia (Art. 104). Rent of a flat abroad, foreign dividends, interest and pensions do not have a Georgian source.
  3. Boundary: employment and services performed in Georgia are Georgian-source income. A resident's services to a foreign client are also a Georgian source, except services provided through a permanent establishment abroad (Art. 104). The place where the money is received is irrelevant (Art. 104). Work and freelancing physically performed from Georgia are taxable, even if the payer is a foreigner.
  4. If the source is Georgian, the rate is 20%, unless otherwise provided (rent of residential property without deductions: 5%) (Art. 81). The declaration is due by 1 April of the following year if the income was not taxed at source (Art. 153).
  5. Tax in the source country and double taxation treaties are a separate question. Exemption in Georgia does not cancel foreign tax.
  6. Where to apply: Revenue Service (rs.ge) for the declaration, clarifications and a certificate of residence.
  7. Evidence: foreign lease agreements, broker statements, statements from a foreign bank or pension authority, a count of days spent in Georgia.
  8. Traps: assuming that a transfer to a Georgian account makes the income Georgian; treating salary or freelance work performed from Georgia as 'foreign income'; confusing the exemption in Georgia with tax in the source country.

Be sure to check

  • a resident's income not from a Georgian source is exempt (territorial principle)
  • what counts as a Georgian source by type of income: dividends, interest, pension, real estate
  • work or services performed from Georgia are Georgian-source income; where the money is received does not matter
  • residency: 183 days in any 12-month period
  • tax in the source country and double taxation treaties: separately

Provisions in force (texts in Georgian)

საქართველოს საგადასახადო კოდექსი

LAW OF GEORGIA ON ENTREPRENEURS

This is an overview, not legal advice. Deadlines and amounts follow the current wording of the law — check them against the text of each article.

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