After seceding from the USSR, Georgia is one of the few post-Soviet countries that has chosen a strategy of tax cuts to develop business and attract foreign investment. The transparency of registration procedures, a minimum of corruption, and bureaucracy add to Georgia's positive points. The 2005 reforms in Georgia reduced the total number of taxes from 21 to 6. Tax rates and income tax in Georgia decreased significantly, and as a result, in the Paying Taxes report on the ease of paying taxes for December 2020, the country took 14th place among 190 participants. But in order to successfully conduct your business in Georgia, you need to be well versed in taxation, be able to use the taxpayer's electronic office, and fill out declarations correctly. In this article, we will tell you in full detail about how taxes are paid in Georgia.
How to get access to the Personal Account of a Georgian taxpayer
The entire area of taxation in Georgia is controlled by the Tax Code and the Revenue Service. After you have registered a company, your data is transferred to the Revenue Service. After that, the Tax Office automatically sends a link to the e-mail indicated in the Register, by which you can register without a personal visit. To register, you will definitely need a phone number, where you will receive a confirmation four-digit code. There are times when the link does not come, in which case the director of the company or a trusted person needs to personally go to the operator at the Tax Office.
The personal account interface is presented in Georgian and English. Therefore, some foreign entrepreneurs have problems filling out personal electronic cards and declarations on their own.
For companies that want to obtain the status of a Virtual Zone for registration on the portal of the Ministry of Finance, to fill out the form for obtaining the status, the same username and password are used as for the portal of the taxpayer.
IP personal account home page
Small Business Declaration
After you have gained access, you must fill out a personal electronic taxpayer card, which indicates:
- Kind of activity;
- Whether your activity is active or inactive at the moment;
- Legal address;
- Confirmed consent that the bank and the tax office have the right to exchange information;
- List of all returns that you will submit (depends on the organizational and legal form and status).
For example:
After you have gained access, you must fill out a personal electronic taxpayer card, which indicates:
- If you have an ordinary individual entrepreneur, then the annual income tax return;
- If an individual entrepreneur with a low status, then a monthly declaration;
- For companies with hired employees and with the status of a VAT payer, 3 declarations are obtained: VAT, income, and profit.
How taxes are paid in Georgia through mobile banking
The procedure for paying taxes is simplified as much as possible and you can do this from anywhere in the world - the main thing is that you have access to the Internet. Here is an example of step-by-step tax payment for an individual entrepreneur with a low status through a personal account with TBC bank:
Amount to be paid = X GEL.
1) TBC mobile bank
2) Main menu
3) Payments and transfers
4) To the state treasury
5) For others
6) New
7) For others
8) Treasury code 101001000 and taxpayer code 111111111 Taxpayer name Full name
9) Additional description მცირე ბიზნესის ყოველთვიური გადასახადი or Monthly income tax.
10) X lariTax payment SMS confirmation is not required.
When taxes are paid in Georgia
The term for paying tax in Georgia directly depends on the type of tax and, again, on the organizational and legal form. Income tax is paid together with the payment of salaries, VAT until the 15th day of the month following the reporting month, and property tax is charged once a year, divided into 3 parts, and paid quarterly. You can find out more about all taxes in Georgia in our previous articles.
Is it possible to pay taxes for others
Georgian legislation provides for the possibility of paying taxes for others, both individuals and legal entities. To do this, you need to indicate at the bank that you are not paying for yourself, but for another person. Then a special form opens where you can specify the identification code. All taxes are accumulated on the so-called personal tax account, and before declaring these funds are there. Only after processing the declaration are they written off and the tax can be considered paid.
What if the tax was incorrectly charged
If you filled out the declaration incorrectly, then in Georgia this is not a big problem. You just need to correct it, that is, submit a new return for the same period. If taxes are incorrectly calculated, when you need to pay more, the system itself, after submitting a new declaration, will calculate the tax and deduct it from your tax account along with the penalty interest.
Important! If at the time when you were due to pay tax, there were funds in your personal tax account, then no interest will be charged, since the correct amount will be automatically debited from the account.
What will happen if you do not pay taxes in Georgia on time
First, the Revenue Tax Service will impose an administrative seizure on the company's property. Since the bank's current account is also the property of the company, the tax office then sends this data and imposes a bank collection. If there are funds in the account, then the tax amount is automatically withdrawn. After that, the collection, since the tax was forcibly paid, is withdrawn. And you can continue to calmly continue activities and dispose of funds.
If the required amount is not on the account, then the account will be arrested before the funds are credited. When and after that funds are not credited, then the next step is the tax authorities through the court demanding reimbursement through the sale of the property. The amount of debt over 100,000 lari is the reason for initiating a criminal case for tax evasion.
Important! A criminal case is initiated against the director only after all the leverage in the form of seizure of property and its sale has been applied. Even if a criminal case has already been opened, then when the full amount of tax is paid, it is terminated.
If you have any questions or difficulties with understanding the tax payment system in Georgia, then we can help you. We will make a competent calculation, fill out a declaration (we will teach you how to fill it out yourself), or explain how to optimize taxes. Leave a request to get a free consultation.