TAX & LEGAL ADVISORY
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VAT and Reverse Charge VAT Registration in Georgia, Tbilisi
Understanding and complying with Value Added Tax (VAT) regulations is crucial for businesses operating in Georgia. Whether you're a local entrepreneur or an international company, our team at TaxAdvisory.ge is here to guide you through the complexities of VAT and Reverse Charge VAT registration and compliance.
Understanding VAT in Georgia
VAT in Georgia is levied at a standard rate of 18% on the supply of goods and services. Businesses are required to register for VAT if their taxable turnover exceeds 100,000 GEL within any continuous 12-month period. Voluntary registration is also possible and can be beneficial in certain circumstances.
Reverse Charge VAT Explained
Reverse Charge VAT applies when Georgian businesses procure services from non-resident entities. In such cases, the responsibility to declare and pay VAT shifts from the foreign supplier to the Georgian recipient. This mechanism ensures tax compliance for cross-border transactions.
Achieving Effective Zero VAT
By registering for VAT, businesses can offset the VAT paid on purchases against the VAT collected on sales. In scenarios where services are provided to clients outside Georgia, and thus not subject to Georgian VAT, businesses can still reclaim VAT on their expenses, effectively reducing their VAT liability to zero. This is particularly advantageous for companies with significant foreign transactions.
Exemptions for Services Rendered Abroad
Under Georgian tax law, certain services provided to clients outside Georgia are exempt from VAT. These include:
- Consulting Services: Professional advice provided to foreign clients.
- Advertising Services: Marketing services directed at audiences outside Georgia.
- Financial Services: Transactions such as loans and financial consulting for non-residents.
- Educational Services: Training and educational programs delivered to foreign students or organizations.
It's important to note that the applicability of these exemptions depends on specific conditions and the nature of the service provided. Consulting with a tax professional is recommended to ensure compliance.
Our Services
At TaxAdvisory.ge, we offer comprehensive services to assist with:
- VAT registration and deregistration processes.
- Preparation and submission of VAT returns.
- Guidance on Reverse Charge VAT obligations and filings.
- Consultation on VAT implications for specific transactions.
Our experienced team ensures that your business remains compliant with Georgian VAT laws, minimizing risks and optimizing tax efficiency.
Contact Us
For expert assistance with VAT and Reverse Charge VAT registration in Georgia, reach out to us.
Our team is ready to provide tailored solutions to meet your business needs.