On the general rules for crediting reverse VAT in Georgia
When a Georgian company is in a civil-law relationship with a natural person, including a person with the status of a sole proprietorship, who is not a tax resident of Georgia, the company must pay the following taxes:
Income tax at the rate of 10%
In order to justify the payment of tax in the specified amount, a tax residency certificate confirming that the individual is a tax resident of another country (not Georgia) should be submitted to the tax authority of Georgia.
Reverse VAT in the amount of 18%
Reverse VAT may be credited and not paid (paragraph "d", part 1, article 175 of the Tax Code of Georgia).
The conditions for crediting the reverse VAT are the simultaneous presence of the totality of the following circumstances:
- Submission of an appropriate tax return;
- The company must have the status of a qualified VAT payer.
In order to obtain the status of a qualified VAT payer, the company must submit a relevant application to the Georgian Revenue Service through the company's electronic portal at https://rs.ge/.
After the application is received by the Revenue Service, its staff investigates whether the company is actually operating on the territory of Georgia. As a rule, supporting documents are requested: lease agreements, contracts with employees and any other documentation.
Based on the documentation received, the Georgian Revenue Service decides whether or not to grant the company the status of a qualified VAT payer.
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