Who Pays VAT and Registration Thresholds
VAT registration in Georgia can be mandatory or voluntary.
Mandatory registration. This kicks in once taxable turnover exceeds 100,000 GEL over any rolling 12-month period. From the moment the threshold is crossed, the business must register with the Revenue Service and start charging VAT. Registration is also mandatory for a single supply of goods or services exceeding 100,000 GEL, and for the import of certain goods.
Voluntary registration. A business can register as a VAT payer before reaching the threshold. This makes sense when you carry a lot of input VAT (for example, from large purchases from VAT-registered suppliers) and want to claim it, or when your counterparties require it.
Who can stay out of VAT. Micro-businesses with turnover under 30,000 GEL and Small Business Status holders (IEs at 1% of turnover) generally don't deal with VAT. Exports of goods and services outside Georgia are zero-rated, and services provided to tourists are exempt as well.
| Parameter | Mandatory registration | Voluntary registration |
|---|---|---|
| Condition | Turnover above 100,000 GEL over 12 months | Optional, before reaching the threshold |
| VAT charged | Mandatory | Mandatory once registered |
| Input VAT credit | Available | Available |
| Who it suits | Anyone past the threshold | Businesses with significant input VAT |
| Downside | Higher price for the end customer | Additional reporting |
Our VAT registration support helps you get set up correctly.
VAT Rate and Tax Base
The standard VAT rate in Georgia is 18%. It applies to domestic supplies of goods and services as well as imports.
What is taxable:
- sale of goods within Georgia;
- services provided domestically;
- import of goods;
- services from non-residents consumed in Georgia (through the reverse charge mechanism).
What is exempt or zero-rated:
- export of goods and services outside Georgia (0%);
- services provided to non-resident tourists;
- certain financial transactions;
- medical and educational services;
- real estate transactions under specific conditions.
A simple example. A company sells goods within Georgia for 10,000 GEL excluding VAT. VAT of 18%, or 1,800 GEL, is added on top. The customer pays 11,800 GEL, of which the company remits 1,800 GEL to the budget, net of input VAT (covered below).
Filing Declarations and Payments
VAT payers file monthly.
Deadlines. The VAT declaration is due by the 15th of the month following the reporting period. The tax is due on the same date.
What goes into the declaration:
- taxable turnover for the month;
- output VAT (charged on sales);
- input VAT (paid to suppliers);
- the balance payable or refundable.
If the balance is negative. When input VAT exceeds output VAT, the excess accumulates. It can be refunded, carried forward to future periods, or applied against other taxes.
Platform. Returns are filed online through the personal account on the Revenue Service portal (rs.ge).
| Action | Deadline |
|---|---|
| Filing the VAT declaration | By the 15th of the following month |
| Paying VAT | By the 15th of the following month |
| Registering after crossing the threshold | Within the statutory period from the date of crossing |
Common mistakes at this stage are late filing and miscalculating the balance. To avoid them, many businesses rely on accounting support.
Input and Reverse Charge VAT
The credit mechanism is the key thing a VAT payer needs to understand.
Input VAT is the tax you paid to suppliers when purchasing goods and services. A registered VAT payer can credit input VAT against output VAT and remit only the difference to the budget.
Example. You bought goods for 1,000 GEL, of which 180 GEL is input VAT. In the same month you sold goods for 2,000 GEL and charged 360 GEL of output VAT. You pay the budget the difference: 360 − 180 = 180 GEL.
Reverse charge VAT. When a service is provided by a non-resident but consumed in Georgia, the obligation to charge 18% VAT shifts to the Georgian recipient of the service. This applies, for example, to social media advertising and digital services from Meta, Google, and other foreign providers. A registered payer can usually credit this tax as input VAT at the same time, so the transaction is often tax-neutral for them.
Who cannot credit input VAT: micro-businesses and entrepreneurs who are not registered VAT payers. For them, the tax paid to suppliers simply becomes part of the cost.
Statuses That Exempt From VAT or Change the Regime
Georgia offers several regimes that reduce or eliminate VAT for certain types of business.
Small Business Status (IE, 1%). An individual entrepreneur with turnover up to 500,000 GEL per year pays 1% of turnover instead of standard taxes and generally doesn't deal with VAT. This makes Small Business Status popular among freelancers.
Virtual Zone (IT). IT companies with Virtual Zone status don't pay profit tax on exported software services, and the export of services is zero-rated for VAT.
International Company status. Provides tax benefits for export-oriented IT and maritime businesses.
Free Industrial Zones (FIZ). Companies operating in a FIZ enjoy a range of exemptions, including VAT on transactions within the zone.
| Regime | Rate | When to choose it |
|---|---|---|
| Standard VAT | 18% | Turnover above 100,000 GEL, sales within Georgia |
| Small Business (IE) | 1% of turnover | Freelancers, income up to 500,000 GEL a year |
| Virtual Zone (IT) | 0% on exports | IT companies with foreign clients |
| Free Industrial Zone | Exemptions | Manufacturing and trade within the zone |
Choosing a regime depends on your business structure and clients. If most of your turnover is domestic, VAT is nearly unavoidable. If you work on export, these statuses let you legally reduce the burden.
VAT for Foreigners and Non-Residents
Transactions involving non-residents deserve special attention.
Who counts as a non-resident. An individual or legal entity whose taxable address is outside Georgia.
Non-resident services in Georgia. If a non-resident provides a service consumed in Georgia, reverse charge VAT of 18% applies: the Georgian recipient of the service charges and declares the tax.
Exceptions. Services provided to non-resident tourists and exports are zero-rated.
Example. A freelancer from another country registers an IE in Georgia and serves clients within the country. If they have crossed the 100,000 GEL threshold and don't use Small Business Status, their domestic services are subject to 18% VAT. If their clients are abroad instead, this counts as an export of services at 0%.
Common Mistakes and Optimization
VAT mistakes are costly for a business. Here are the frequent ones.
- Registering late. Missing the 100,000 GEL threshold and continuing to operate without VAT risks back taxes and penalties.
- Missing out on beneficial voluntary registration. With significant input VAT, skipping registration means losing the right to credit it.
- Mixing taxable and exempt transactions. Without separate accounting, it's hard to calculate the credit correctly.
- Miscalculating reverse charge VAT on services from foreign providers.
- Filing late — even at zero tax due, a late filing still triggers penalties.
How to avoid them: keep records from month one, track turnover in real time, choose a regime early, and bring in an accountant when needed. You can check current rates and requirements on the Revenue Service of Georgia website.
Where to Go From Here
VAT in Georgia is manageable once you understand the thresholds, the credit mechanism, and the available statuses. For businesses with domestic turnover, timely registration and accurate reporting matter most. For export-focused and IT businesses, special regimes offer legal ways to reduce the burden.
If you're unsure about your VAT calculations, it's worth consulting an accountant. Small Business Status or Virtual Zone status will require legal support to set up. And if you deal with reverse charge VAT and foreign suppliers, it's worth structuring your tax model in advance.
Legalese Georgia helps with VAT registration, accounting support, and choosing the right preferential status. The first consultation is free: call us at +995 591 797 797 or message us on WhatsApp. For more on the country's tax system, see our complete guide to taxes in Georgia.