Taxation of Digital Services in Georgia

Adrienn Juhász's picture
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Revenue Service of the Ministry of Finance of Georgia (GRS) has taken an important step in taxation of digital services.

Starting from October 1, 2021 the Tax Code of Georgia and Order №996 of the Minister of Finance of Georgia of 31 December 2010 on Tax Administration establish that a taxable person, who is not established or has no habitual residence in Georgia, or has no fixed establishment in Georgia, shall register and pay Value Added Tax (VAT).

More precisely, this tax obligation is only for foreign taxable persons who provide digital services to be used in the territory of Georgia by a natural person who is not a taxable person or who is a taxable person, but the service received by them is not connected to their economic activity. Digital Services include telecommunication, radio or television broadcasting and electronically supplied services.

With that end in view, GRS designed a special platform for a simplified registration and reporting of abovementioned persons - https://nr.rs.ge/.

Under the Georgian legislation, VAT shall be calculated and paid for digital services supplied starting from October 1, 2021 and the reporting period shall be a quarter.

VAT Return shall be filed for each reporting period through the VAT portal no later than the 20th day of the month following the reporting period and tax shall be paid no later than the last day of the same month. Tax can be paid in both local (Georgian Lari) and foreign currencies, U.S. Dollar, Euro, which can be selected at the time of the registration on the VAT portal.

Additional information on the taxation of foreign taxable persons supplying digital services in Georgia is available on the official website of the GRS - https://rs.ge/ in the „VAT Portal on Digital Services“ section. Should the taxpayers have any questions, additional clarifications can be received by e-mail - evat@rs.ge.

GRS tends to establish an open and effective communication, based on mutual commitments, with non-resident companies – potential subjects of taxation. We would greatly appreciate if the fellow tax administrations disseminated this information among the companies that may be subjected to our tax regulations.