VAT Registration in Georgia

Who Must Register as a VAT Payer

Registration is mandatory in the following cases:

• Exceeding the 100,000 GEL threshold. If the cumulative volume of VAT-taxable transactions over any continuous 12-month period exceeds 100,000 GEL, the taxpayer must apply to the tax authority within 2 business days of the date the threshold is exceeded.
• Production or import of excisable goods (except those exempt from VAT) — before the first supply in Georgia.
• Reorganisation, if the founder is a VAT payer — notification within 10 calendar days of the reorganisation being completed.
• Contribution of goods or services as share capital in another legal entity — notification before the transaction, but no later than 10 days from the date of contribution.

Voluntary Registration

Any individual or legal entity may voluntarily register as a VAT payer. Registration takes effect from the date the application is submitted to the tax authority, provided the application is submitted before the mandatory registration deadline.

Deregistration

Grounds for deregistration:

• Liquidation of the enterprise or organisation.
• Death of the individual.
• Initiation of bankruptcy proceedings.
• Written application by the taxpayer, provided turnover over the last 12 months has not exceeded 100,000 GEL excluding VAT and at least 1 year has passed since the last registration.

Filing and Payment

VAT returns are submitted through the taxpayer portal rs.ge monthly — no later than the 15th day of the month following the reporting period. VAT is paid by the same deadline.

For temporary importation of goods:

• Unregistered taxpayers — pay VAT by the 15th of the following month.
• Registered taxpayers — VAT calculation is treated as completed automatically.

For the import of goods — payment follows the rules established for customs duties. For goods under HS codes 8401–9033 — no later than 45 days after release.

VAT deduction: which documents you need

A VAT payer may reduce the VAT due by the VAT paid on purchases of goods and services (Article 174 of the Tax Code). The grounds for deduction are (Article 176):

• a tax invoice issued for the purchase of goods or services
• an import declaration for imported goods
• VAT assessed under the reverse charge and included in the return

Without such a document the deduction does not apply, so supplier invoices are worth checking straight away rather than at the end of the period.

Services from foreign companies: the reverse charge

When a foreign person with no fixed establishment in Georgia provides a service to a buyer in Georgia, and the Tax Code treats Georgia as the place of supply, the buyer assesses the VAT as a tax agent (Article 161). A buyer that is not registered as a VAT payer pays this tax no later than the 15th of the month following the reporting month (Article 168). A registered payer reports it in the return and may deduct it.

This also applies to small companies and IEs that buy, for example, services from foreign contractors.

VAT penalties

Once the fine for operating without registration is applied, the late filing and understatement fines are not charged on VAT returns for the same period (Article 282). The fine for deduction based on a fictitious transaction is set by Article 280. General late filing fines are covered in our article on late filing tax penalties in Georgia, and the tax itself in our guide to VAT in Georgia.

VAT in the Tourism Sector

Under Order No. 107 issued by the Minister of Finance on 28 March 2023, tourism products provided to foreign tourists in Georgia are exempt from VAT with the right to deduct input VAT.

A tourism product under Georgian legislation is a tourism service comprising at least two components: transportation, accommodation, food, tour guide services, or auxiliary tourism services. Services provided to tourists outside Georgia and related support services are classified as services provided outside Georgia and are not subject to VAT.

Tour operators that purchase goods and services to facilitate the arrival and stay of tourists are entitled to a VAT deduction for the goods and services acquired.

Special Cases for Individuals

• Sale of residential property. Selling up to 4 residential apartments with land within 48 months is not treated as economic activity — no VAT applies.
• Rental income. If income from renting residential or commercial property exceeds 100,000 GEL over 12 months — registration is mandatory within 2 business days.
• Sale of a share in a company. Not subject to VAT — this is a financial transaction exempt without the right to deduct.
• Interest income. Not subject to VAT — exempt financial service.

Frequently asked questions

How long do I have to register once the threshold is crossed?

No more than 2 business days from the day taxable transactions over any 12 consecutive months exceeded GEL 100,000 (Article 165 of the Tax Code). The obligation to charge VAT arises from the very transaction that crossed the threshold.

What is the fine for operating without VAT registration?

5% of the VAT-taxable transactions carried out during the unregistered period (Article 282). Once this fine is applied, the late filing and understatement fines are not charged on VAT returns for the same period.

Do I pay VAT when buying services from a foreign company?

Yes, if the Tax Code treats Georgia as the place of supply. The buyer assesses the VAT under the reverse charge. A buyer not registered as a VAT payer pays the tax no later than the 15th of the following month.

Does an IE with Small Business Status have to register for VAT?

Yes, once the same GEL 100,000 threshold is exceeded. Article 92 of the Tax Code expressly provides that an IE with Small Business Status goes through mandatory VAT registration on the general terms.