LumenWhen does a freelancer or company in Georgia have to register for VAT?
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Under the Tax Code of Georgia, you must apply for VAT registration within 2 business days after your VAT-taxable supplies pass GEL 100 000 in any 12 consecutive months. VAT is 18%, declared and paid monthly by the 15th. Services to a business client established abroad generally count as provided outside Georgia, so they aren't VAT-taxable supplies in Georgia.
Key facts
| What | The law says | Source |
|---|---|---|
| Threshold | More than GEL 100 000 of VAT-taxable supplies of goods and services in any 12 consecutive calendar months | Tax Code, art. 165(1) |
| Deadline to apply | Within 2 business days of passing the threshold | Tax Code, art. 165(1) |
| VAT due from | The transaction that took you over GEL 100 000, including that transaction | Tax Code, art. 165(2) |
| Voluntary registration | Allowed; you are a VAT payer from the day you apply | Tax Code, art. 165(6) |
| Rate | 18% | Tax Code, art. 166 |
| Return and payment | Monthly, by the 15th day of the following month | Tax Code, arts. 167, 168(1) |
| What is VAT-taxable | Goods and services supplied for consideration in Georgia within economic activity, and imports | Tax Code, art. 159(1) |
| Services to a business client | Provided where the client is established (general rule) | Tax Code, art. 162¹(3)(a) |
| Services to a private client | Provided where the provider is established (general rule) | Tax Code, art. 162¹(3)(b) |
The GEL 100 000 test
Article 165(1) of the Tax Code says a taxable person must apply to the tax authority for VAT registration no later than 2 business days after the total of VAT-taxable supplies of goods and services over any 12 consecutive calendar months passes GEL 100 000. VAT is owed from the transaction that crossed the line, including that transaction (art. 165(2)).
A taxable person is anyone who independently carries on economic activity (art. 158(1)). VAT-exempt transactions are left out of the GEL 100 000 total, except exports of goods, transactions exempt under Article 172(1)–(2), and exempt financial or real-estate transactions when they are your main activity (art. 165(7)).
You can also register voluntarily; you are then a VAT payer from the day you apply (art. 165(6)).
Rate and returns
The VAT rate is 18% (art. 166). The accounting period is a calendar month (art. 167). A registered VAT payer files a declaration and pays the tax by the 15th day of the following month (art. 168(1)).
Services for foreign clients
Only services provided in the territory of Georgia are VAT-taxable transactions (art. 159(1)(b)). Article 162¹ decides where a service is provided. As a general rule:
- for a client who is a taxable person, the service is provided where the client is established (art. 162¹(3)(a));
- for a client who is not a taxable person, it is provided where the provider is established (art. 162¹(3)(b)).
For this purpose any person other than a non-entrepreneur natural person counts as a taxable person (art. 162¹(2)). A service that isn’t provided in Georgia is treated as provided in another country (art. 162¹(1)). Article 162¹ has its own exceptions, for example for services related to real estate, events and transport (art. 162¹(4)–(10)).
Related questions
- Small business status: a small business that becomes obliged to register for VAT does so under Article 165. See the page on Georgia’s small business status.
Sources
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This is general information, not legal advice, and Lumen is not a law firm. Rules change and offices differ: check the official sources above before you act. Found something wrong or out of date? Write to support@lumen.observer.