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Formation of the tax policy of the company – resident of the virtual zone of Georgia

TASK

Formation of the company’s tax policy in terms of income tax.

SOLUTION

Before signing the contract for accounting and tax support, an analysis of primary payments was carried out on behalf of a company that is a resident of the virtual zone of Georgia. These types of companies are exempt from VAT, income tax, while the obligation to pay income tax (from payments to individuals) and tax at the source (from payments for services outside Georgia) remains. The client monthly orders part of the developments in various countries (CIS, Europe, and Asia) and is obliged to pay 10% of the tax at the source from these amounts, which significantly reduces the profitability of services. Jara Accounting specialists have compiled a list of optimal jurisdictions – countries with which Georgia has concluded agreements on the avoidance of double taxation, for the legal avoidance of this tax. The client changed the service providers to a “white list” within two months and was released from the obligation to pay tax at source.

DIFFICULTIES

To select the optimal format for managing the company’s expenses, it was necessary to analyze more than 20 agreements on the avoidance of double taxation in the shortest possible time and make a reasoned conclusion.

RESULT

A significant reduction in the tax burden, eliminating the risk of a tax audit.

 

April 2020

Регистрация бизнеса и бухгалтерское обслуживание в Грузии

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