Crypto Mining In Georgia Country:
A Liberal Competitive Destination
Crypto Mining in Georgia Country is competitive. Georgia is among the top mining countries in the world. Georgia has favorable conditions to attract foreign investors who wish to develop in this field:
- A lack of legislative restrictions on cryptocurrency mining. Georgia has no regulatory restrictions on cryptocurrency mining and trading and has no special legislation. Thus, crypto miners and traders can run their crypto-activities without hassle when registered in Georgia.
- No license needed
Crypto Mining In Georgia Country: What’s driving growth in the industry?Who would have thought that a small country in the Caucasus Mountains could become one of the world’s leaders in cryptocurrency mining? Despite its small size and population, Georgia has become a popular spot for cryptocurrency mining thanks to its cheap electricity, the absence of legislative restrictions, and attractive tax incentives. This combination of factors has engaged Georgian citizens and foreigners who want to try their hand at cryptocurrency mining.
Why should you do Cryptocurrency mining in Georgia?Georgia is a mining country and constantly growing in this field. According to the latest estimations, between 100 000 and 200 000 people are involved in small-scale cryptocurrency mining farms in Georgia. Indeed, the advantages of mining cryptos are significant in Georgia.
Crypto Mining In Georgia Country: Cheap Electricity.The low cost of electricity attracted foreign investors to Crypto mining in Georgia Country. The energy price is half what it is in Europe and the US. About 9 to 11 cents per 1 kW and free in the country’s mountainous regions. The cheap utility made Georgia an oasis for miners and one of the biggest Bitcoin mining hubs worldwide.
Crypto Mining In Georgia Country: What’s Going On In 2022?In 2022, due to the Ukrainian crisis and the increase in energy prices worldwide, cryptocurrency mining activity lost a bit of its attractiveness for some investors in Georgia. How long will this situation last? Already in September 2022, we can see that the energy prices have probably risen to their highest point in summer. Still, we forecast in 2023 that crypto Mining in Georgia Country remains attractive thanks to the country’s obvious benefits like cheap electricity and tax incentives. Energy prices will decrease steadily in the coming months after this time of strong price increases due to speculation. Otherwise, Georgia offers a very interesting alternative source of energy than energy from fossil fuels. Indeed, the Georgian potential in renewable energy, particularly from Hydro Power Plant, is huge (see below). HPP would be the best plan B for producing electricity used for crypto mining in Georgia Country.
Crypto Mining In Georgia Country: Significant Tax IncentivesAlthough the National Bank of Georgia does not consider bitcoin and other cryptocurrencies legal tender, it does not control transactions with virtual money. Georgia’s authorities are crypto-friendly and don’t influence the circulation of digital money in any way. The Ministry of Finance’s statement (2019) provides market players with the framework for the taxation of the crypto-currency sector. These tax provisions significantly increase the attractiveness of crypto trading and crypto mining in Georgia Country.
Crypto Mining In Georgia Country: Individuals Incentives
- Individuals resident in Georgia are exempt from Personal Income Tax on any profits received from the sale/transactions of cryptocurrencies,
- The sale of cryptocurrencies and their exchange to a Georgian national currency (Lari – GEL) or another foreign currency is exempt from VAT of 18%; it is not subject to a value-added tax of 18%.
Crypto Mining In Georgia Country: Corporate IncentivesA legal entity in Georgia involved in mining or trading cryptocurrencies, Corporate Income Tax is due to worldwide corporate profits.
- Suppose a legal entity in Georgia is engaged in the mining and trading of cryptos. Only a 15% CIT and a 5% dividend tax are due.
- But if these profits are retained within the company or reinvested in the company’s business development, then no tax is due (0%). The same applies to shareholder’s dividends distribution (Tax-free instead of 5% if dividends are reinvested or retained within the company)
- The sale of cryptocurrencies and their exchange to Georgian national currency (Lari – GEL) or another foreign currency is exempt from VAT 18%
Crypto Mining In Georgia Country: Hash Incentives
- The sale of computing power (Hash) is considered a provision of an electronic service. It is not subject to VAT if a Georgian resident sells it to a non-resident abroad.
- In contrast, the sale of computing power within Georgia is subject to VAT.
- Hash operations between residents in Georgia and the purchase of a hash by a resident from a non-resident are subject to VAT. However, this transaction (purchasing computing power / Hash) is subject to reverse VAT in Georgia if a Georgian resident purchases hash power abroad.
- In addition to VAT, 10% of withholding tax might apply on income generated from the purchase or sale of hash to a non-resident. This withholding tax might be prevented using the relevant double tax treaties signed by the Georgian government.
- The export and sale of Hash Power abroad entitle you to charge your final customer VAT.