Income tax in Georgia

May 16, 2017

INDIVIDUAL TAXATION

Georgia applies a territorial tax system for individuals. Residents are taxed on their Georgian-sourced income. Each registered individual taxpayer must file a separate return but families and married couples may elect file joint property tax returns.

INCOME TAX

Taxable income is classified according to the following categories: (1) employment income, (2) dividends and interest, (3) royalties, (4) pensions, (5) rental income, (6) income from disposal of property, and (7) income from independent activities, including business income.

Resident individuals are generally taxed at a flat rate of 20%.

RENTAL INCOME
Resident individuals earning rental income aregenerallytaxed at a flat rate of 20%.

Residents leasing out residential property may be taxed at a flat rate of 5% on the gross rent.

CAPITAL GAINS
Capital gains realized from the sale of a residential apartment or house with attached land plot is taxed at a flat rate of 5%.

Capital gains realized from sales of properties connected with business activities are taxed at a flat rate of 20%.

PROPERTY TAXATION

Property Tax

Property tax is a local tax levied on the market value of properties, excluding land. The property tax rate varies according to the amount of annual family revenue of the individual. The exact rate within the range is fixed by the local government where the property is located.

PROPERTY TAX

TAX BASE, GEL (€) TAX RATE
Up to 40,000 (€14,286) 0%
40,000 – 100,000 (€35,714) 0.05% - 0.20%
Over 100,000 (€35,714) 0.80% - 1.00%
Source: Global Property Guide

The rates are not progressive. The applicable tax rate applies on all property subject to property tax.

Land Tax

Land tax is levied at different rates, depending on the land classification and the location.

For land used for economic activities, including leases), land tax is levied at a flat rate of GEL0.24 (€0.10) per sq. m. The rate is further adjusted by territorial coefficients at a maximum of 1.5.

For agricultural land, land tax rates vary according to the administrative unit and land quality. The tax rate varies from GEL1.50 (€0.53) to GEL100 (€36) per one hectare. The rate is further adjusted by a territorial coefficient at a maximum of 150%.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies is subject to corporate income tax at a flat rate of 15%. Taxable income is calculated as the difference between gross profits and income-generating expenses.

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