Fully automatic VAT refund system is now in place in Georgia

Salome Samadashvili's picture
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In February 2019, the Revenue Service of the Ministry of Finance of Georgia have launched a new project, aimed to introduce automatic VAT refund system. Initially the new system meant to subject VAT returns to automated risk-based verification process, where excess credit VAT declarations were identified. Preferential treatment was given to low-risk returns. Low-risk declarations, which comprise more than 90% of all returns were allocated on so called ``Green Card``. This allowed taxpayers either to request excess credit VAT amount to be paid by clicking a payment button or leave the amount to offset tax arrears. The rest of high-risk returns were subjected to manual processing. 

Since February 2019 the system was subjected to gradual modification and beginning with November 2020 the system turned fully automatic, where excess VAT amount is automatically credited on taxpayers' bank account without sending a payment request.

The above mentioned reform is expected to support business taking into account the impact of COVID-19 pandemic on national economy by increasing their cash flow, thus access to additional finance. According to the statistics, 9,238 taxpayers have already benefited from the improvements. The value of refunded excess credit VAT amounts to 73 mln GEL for the period October-November 2020. 

In total more than 150 000 taxpayers will benefit from the automatic VAT refund system annually. The total value of money flowing in the business will exceed 1 bln GEL annually.