Tax lawyer in Georgia - rates that fit on one page, and a procedure that does not
Georgia's tax system is one of the simplest in the world by its rates: six taxes, corporate profit taxed only on distribution, small businesses paying one percent of turnover. The complexity lies elsewhere - in the procedure. A Revenue Service audit, an assessment, late-payment interest and penalties, three stages of appeal with strict deadlines, and a criminal threshold beyond which a tax dispute becomes an investigation - none of that is simple.
A tax lawyer is not an accountant: the accountant calculates and files, the lawyer defends - during the audit, in the dispute and in court - and structures things in advance so that the dispute never arises. This page covers both: what decides each tax issue, which rates and thresholds apply today, how a dispute passes through its three stages, what the special statuses really give, and how it is determined which country your income belongs to - a question our foreign clients ask more often than any other.
Verified tax lawyers
Active status in the register and tax law as the primary specialisation. The list marks who works on disputes with the Revenue Service and the Council, who on international structuring, and who has a background as an auditor or at the Revenue Service.
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Call: 568 330 3186 tax issues in Georgia and what decides each
In a tax dispute the burden of proof formally lies on the Revenue Service, in practice on the taxpayer: whoever cannot produce the document loses. Here is the document or fact that decides each category.
The tax audit
Decisive: what you hand over and how. A desk audit is conducted remotely by requesting documents; a field audit on your premises, with a court order or your consent. Every request has a deadline, every document handed over gets a delivery record. The lawyer "manages" the audit: what is required by law and what by habit, what goes into the audit report and what must go into your objections to it - the first document of the dispute.
Disputing an assessment
Decisive: the deadline. 30 days from service of the tax demand to appeal at the first stage, and the same 30 days at each subsequent one. Missing it makes the assessment final, however obviously wrong. The appeal is not "I disagree" but an itemised document: each assessed item, the contrary rule, the evidence. Filing the appeal suspends enforcement of the assessed amount - the main reason the lawyer insists on appealing even while negotiations continue.
Related parties and pricing
Decisive: justification of the market price. A transaction with a related party - a partner's company, a foreign parent, a director's relative - must be on market terms, or the Revenue Service "corrects" the price itself and taxes the difference. For international groups this is transfer pricing documentation; for a local business, often an office "cheaply" rented from a partner that gets reclassified as free use.
VAT and reverse charge
Decisive: the moment of registration and the place of supply. The 100,000 GEL turnover threshold is counted over any continuous 12 months, not a calendar year - and VAT liability arises from the day it is exceeded, registered or not. Services received from a foreign company are taxed by reverse charge, which even a non-VAT payer must pay. VAT disputes are the most expensive because 18% is calculated on turnover, not profit.
Individual tax residency
Decisive: the number of days and the source of income. 183 days in any continuous 12 months make you a Georgian tax resident and your worldwide income falls under Georgian rules - although foreign-source income of an individual is, as a rule, exempt. A non-resident pays only on Georgian-source income. Border-crossing records, the contracting party and the place of payment are the three facts that decide a residency dispute.
The criminal threshold
Decisive: the amount and intent. Tax evasion in a large amount is Article 218 of the Criminal Code, and the audit file becomes the basis for opening a case. The lawyer's task is to keep the dispute in the tax domain: a mistake and intent are different things, and voluntary payment of the assessment often excludes criminal prosecution.
8 rates and thresholds that define the Georgian tax system
These figures come from the Tax Code as currently in force and are updated with every amendment. Applying them to a specific situation - especially near the thresholds - is exactly where a lawyer is needed.
- Corporate tax - the Estonian model
- A company's profit is not taxed while it stays in the company. It is taxed at 15% on distribution - dividends, and also what the Code treats as equivalent to distribution: non-business expenses, free transfers, non-market transactions with related parties. Those "deemed distributions", not dividends, are the main source of assessments.
- Personal income tax 20%
- An individual's income - salary, services, rent - is taxed at 20%. Dividends and interest at 5%, withheld at source. Residential rent received by an individual at 5% if no expenses are deducted. The same amount costs differently as salary and as dividend - the starting point of any structuring.
- VAT 18% and the 100,000 threshold
- Taxable turnover above 100,000 GEL in any continuous 12 months - mandatory registration. Voluntary registration below the threshold is possible and often useful if your customers are VAT payers and want the credit. Exports and a range of services to foreigners are zero-rated or exempt - but only with documentary proof.
- Small business - 1% of turnover
- An individual entrepreneur with annual turnover up to 500,000 GEL pays 1% of turnover, with no expense accounting. Exceeding the threshold raises the rate and may cancel the status. The status does not cover certain activities and does not replace the VAT obligation - the 100,000 threshold applies to small businesses too.
- Micro business - 0% up to 30,000
- An individual without hired staff and with annual income up to 30,000 GEL is exempt from income tax. The status is registered with the Revenue Service and confirmed every year - nobody is "micro" automatically.
- Property tax
- Applies to an individual if the family's annual income exceeds 40,000 GEL, at up to 1% of market value. For a company - on book value. Land tax is separate and calculated by area. The return must be filed by the taxpayer - the Revenue Service does not remind you, and foreign owners of Georgian apartments are the most frequent late filers.
- Limitation - 3 years
- The Revenue Service may assess tax for a period after which 3 years have not passed (extended in certain cases). Within the same period you may claim a refund of overpaid tax. The duty to keep documents is longer than that - the expiry of the period does not cancel the archive.
- Interest and penalties
- Late-payment interest accrues daily on the overdue amount; the penalty for understated tax is half of the assessed amount, less in certain cases where the understatement is small. This means an assessment often doubles with penalty and interest - which is why it is worth disputing even the part where the principal is not in doubt.
The 3 stages of a Georgian tax dispute - what each gives and how much time you have
A tax dispute in Georgia follows a mandatory sequence: two administrative stages before court, and they cannot be skipped. At each you have 30 calendar days from service of the decision. The tax lawyer's job is to bring the case to the first stage with the complete file - adding a new argument later becomes difficult.
Virtual Zone, International Company, Free Industrial Zone - what they really give
Georgia's three special regimes are the main reason for foreign investment and, at the same time, a frequent source of assessments - because each has conditions whose breach cancels the status retroactively. A Virtual Zone Person is an IT company selling software products outside Georgia: that income bears no corporate tax and no VAT, while dividends are taxed at the usual 5%. The condition is that the product must be created in Georgia, which the Revenue Service has been checking actively in recent years: staff, expenses and real activity on the ground. A company with one director and no employees in Georgia is the classic case that fails.
International Company status reduces corporate tax to 5% and employees' income tax to 5% for IT and maritime companies, and removes property tax - but requires two years of experience in the field, real operating expenses in Georgia and income only from permitted activities. A Free Industrial Zone (Kutaisi, Poti, Tbilisi) gives exemption from corporate, property tax and VAT inside the zone, while transactions with Georgian companies are taxed at a separate rate - the zone is for manufacturing and trading businesses, not for an office.
The common rule: a status is a right, not an automatism. The application, confirmation of eligibility, annual compliance and documentation that survives an audit - the tax lawyer's work does not end with obtaining the status; that is when it begins.
Which country your income belongs to - tax residency, double taxation and remote work
An individual is a Georgian tax resident if they spend 183 days or more in the country in any continuous 12 months. For residents Georgia applies a territorial principle: Georgian-source income is taxed, foreign-source income, as a rule, is not. This makes the country attractive for remote workers, but the definition of "source" is the contested ground: is work performed from Georgia for a foreign company Georgian-source or foreign-source? It depends on who the client is, where the work is done and how it is paid. Revenue Service practice here is still developing, and a lawyer's advice before the first transfer is cheaper than after the audit.
Georgia has double taxation treaties with more than 50 countries. A treaty decides which country taxes what, and often reduces or removes withholding tax in Georgia - but only on presentation of a residency certificate and compliance with the procedure. For high-net-worth individuals there is a separate route to residency without counting days - by a wealth or income threshold. The taxation of crypto assets, foreign dividends and property sold abroad is a separate question each time, where the text of the Code and the Revenue Service's public rulings must be read together.
Questions about tax lawyers in Georgia
What triggers a tax audit?
Risk criteria the Revenue Service calculates automatically: growing VAT credits without growing income, years of losses alongside dividend distributions, turnover with related parties, a tax burden below the sector average. Also an audit of a counterparty that "spills over" to you, and liquidation, which triggers an audit automatically.
Do I have to pay the amount first in order to appeal?
No. Filing an appeal at the administrative stages suspends enforcement of the assessed amount - accounts are not frozen, property is not sold. At the court stage suspension is no longer automatic and an application for interim measures must be filed. Interest, however, accrues for the whole duration of the dispute - if you lose, the amount will be larger. That risk must be assessed with the lawyer at the outset.
How many years back can the Revenue Service assess?
As a general rule, within a three-year limitation period counted from the end of the tax period. The period is extended in certain cases, for example where a criminal case exists. Checking the limitation period is the first item of any appeal: the part of the assessment relating to an expired period is cancelled without further argument.
I have an accountant - why do I need a tax lawyer?
The accountant records transactions and files returns; in an audit they are often an interested party, because the audit evaluates their work. The lawyer reads the Code, the Revenue Service's methodological guidance and court practice, builds the dispute strategy and catches procedural breaches - deadlines, the form of the report, an unreasoned conclusion. The best result comes from the two working together.
I am an individual entrepreneur with small business status. What can go wrong?
Three typical mistakes: forgetting the VAT threshold (1% does not replace the 100,000 rule), staying "micro" without hired staff when you actually have an employee, and receiving part of your income from an activity the status does not permit. Each leads to retroactive cancellation of the status and recalculation at 20% - on turnover, not profit, for the whole period. Foreign freelancers registered as sole entrepreneurs meet the first mistake most often.
The Revenue Service says my expense is "non-business". What does that mean?
The central dispute of the Estonian model: an expense unrelated to the business - a personal trip at the company's cost, a partner's car, an unsubstantiated consultancy - is treated as a distributed profit and taxed at 15%, with a penalty. The defence is documenting the economic purpose of the expense: contract, deliverable, link to income. "Everyone does it" is not an argument.
I work for a foreign company and live in Georgia. Where do I pay tax?
If you have become a Georgian resident (183 days), the question is the source of the income. If the work is physically performed in Georgia, the Revenue Service may treat it as Georgian-source and claim 20%, even though the employer is foreign. Whether the double taxation treaty with your country changes that is an individual analysis - better done in your first year than during an audit in your third.
Can I find out in advance how the Revenue Service will tax my transaction?
Yes - the advance ruling: the taxpayer asks the Revenue Service for an official position on a specific transaction not yet carried out, and that position then binds the Service. The procedure has a fee and takes time, but for a large or non-standard transaction - a restructuring, the entry of a foreign investor, a new product - it is the only way to exclude the dispute in advance.
Tax lawyer by city
Tax disputes are centralised - the Council and the court sit in Tbilisi - but audits happen on the ground, and Batumi's tourism, the zones of Kutaisi and Poti and regional agriculture each have their own tax specifics.
Adjacent practice areas
A tax evasion case belongs to criminal law, challenging Revenue Service acts follows administrative procedure, the structure belongs to corporate law, and a bank blocking an account to banking law.
Received an audit notice or an assessment? The 30 days are already running
Within 15 minutes the coordinator will contact you and match you with a tax lawyer who, at the first consultation, checks the assessment for limitation and procedure - before the appeal deadline passes.