Personal Income Tax In Georgia Country:
0% On Foreign Income
Personal Income Tax In Georgia Country is one of the best in Europe. Georgia offers a welcoming and business-friendly environment. Many individual entrepreneurs consider Georgia’s dynamic and liberal economy an attractive place full of opportunities. Georgia is one of the world’s lowest-taxed economies for those who choose to invest, start a business, or live there. Georgia provides several highly beneficial tax incentives for individuals operating in the country. You can optimize Personal Income Tax in Georgia to a 1% tax rate if appropriately structured.
Georgia Personal Income Tax : The Benefits Of The Georgian Territorial Taxation Regime
Georgia is the only European country with a territorial taxation regime. It means that Georgia Personal Income Tax is levied on Georgian-source income instead of taxing individuals’ overall income (foreigners, residents, or non-residents). Thanks to this territorial tax system, unique in Europe, the foreign-source income of individuals is not subject to any taxation.
Georgia could be an exciting country if :
- you receive rental incomes from your real estate properties abroad, Airbnb, for example
- you are a digital nomad and IT entrepreneur who sell services and products worldwide
- E-commerce business owners
- Traders and crypto-traders
- Influencers who receive income from the brands they support.
- Royalties owners,…
The list is non-exhaustive. All passive income owners can benefit from this Georgian territorial taxation.
Personal Income Tax In Georgia Country: Taxes Incentives
Freelancers, welcome to Georgia! Foreigners, residents, and non-residents benefit from a special status granting them many advantages. If you run a business that you are the sole owner of, the Individual Entrepreneur Status offers incredible tax advantages.
- Individuals with an annual turnover of less than 30,000 Georgian lari(GEL), no employees, and who register as a micro business will be exempt from Georgia Personal Income Tax.
- Individual entrepreneurs with an annual turnover of less than GEL 500,000 ($165000) may register as a small business status. Thanks to this status, Georgia Personal Income Tax falls to 1%. This rate increases to 3% if annual turnover exceeds GEL 500,000.
Georgia Personal Income Tax & Residence
An individual is deemed a tax resident of Georgia if the individual spends more than 183 days in any continuous 12-month period during the current tax year.
Resident or non-resident status is established for each fiscal period (from 1 January to 31 December). The day count is reset at the beginning of each fiscal year.
The High Net Worth Program in Georgia allows you to avoid the 183 days of presence in Georgia to get the tax residency.
Suppose you want to establish a tax residence in Georgia. In that case, Georgia will consider that you earn your income from Georgia. In this case, Georgia Personal Income Tax will be levied at a 20% flat rate.
Personal Income Tax in Georgia: Overview
Personal Taxation in Georgia
Individuals are exempt from Personal Income Tax if their revenues are not Georgian-sourced.
Personal Income Tax Rate
Personal income tax for Georgian-source income is subject to a flat tax rate of 20%.
Georgia Personal Income Tax & Property tax
Individual resident whose annual family income exceeds GEL 40,000 a year is liable for 1% property tax. An Individual shall pay property tax no later than 15 November of a calendar year.
- Immovable property owned by the individual (including property rented out from non-residents and property leased to other persons in Georgia).
- Yacht, Boat, aircraft (helicopter and airplanes)
- Cars bought from 2018.
Georgia Personal Income Tax & Property Tax On Land
A natural person shall pay property tax on land no later than 15 November of a calendar year:
- On land in his possession
- On land owned by the state used or owned by them
- On a parcel of land owned and/or used by a natural person that is registered as property of a deceased person, except for the cases when the plot of land is used under a lease, rent, usufruct, or similar agreement.
Personal Income Tax In Georgia Country: Capital Gains
The profit from selling a vehicle and an apartment/house with a land plot is subject to tax at a 5% rate.
Georgia Personal Income Tax & Rental income
- Personal income tax in Georgia Country applies to rental income received by an individual from the rental of residential space in Georgia to an organization, legal entity, or individual for residential purposes if the individual does not make deductions from such income.
- A non-resident individual who receives rental income from a person not required to act as a tax agent and withhold taxes is subject to Personal Income Tax In Georgia on the difference between Georgia source income earned in a calendar year and deductions related to the receipt of that income.
Personal Income Tax In Georgia Country & Revenue Service
The tax year in Georgia is the calendar year.
Individuals must submit income tax declarations to the Revenue Service of Georgia at their place of registration before 1 April for the income received in the previous calendar year. These provisions apply to :
- Resident individuals, including foreign individuals with Georgian tax residency, for whom income is not taxed at the source in Georgia.
- Non-resident individuals with Georgian-source income who are not subject to taxation at the source of payment.
Payment Of Personal Income Tax In Georgia Country
An Individual Entrepreneur has to make estimated payments of Personal Income Tax amounts in four installments (15th of May – July – September, and December).