globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

20 July 2021

Georgia imposes VAT on foreign suppliers of digital services

As part of recent Value Added Tax (VAT) reform in Georgia, effective from 1 July 2021, foreign suppliers of digital services to non-entrepreneurial natural persons (consumers) in the territory of Georgia are required to assess and pay VAT to the state budget of Georgia. There is no minimum revenue threshold.

Digital services are treated as rendered in the territory of Georgia if any one of the following criteria is met:

  • The bank account used by recipient is with a financial institution located in Georgia
  • The recipient is physically located in Georgia
  • The IP address of the device used by recipient is in Georgia
  • The telephone code used by the recipient belongs to Georgia

Assuming any of the above criteria is met, such foreign suppliers will undergo a simplified online registration procedure through the special platform created on the website of the Georgian Revenue Service. To complete the registration procedure, the foreign supplier will have to submit some basic information such as the legal name of the organization, the headquarters’ address, its website, country of residence for tax purposes, tax ID, and contact persons, among others. There is no requirement to present any documents.

VAT returns can be submitted through the same online platform. The VAT reporting period is quarterly. The deadline for submission of a VAT return is the 20th of the month following the reporting period. Thus, the first VAT return under the new rules is due by 20 October 2021.

As to the payment deadline, it is the end of the month following the reporting period. Thus, the first VAT payment under the new rules is due by 1 November 2021. Payment can be made either in US dollars or in Euro. Since foreign currency payments are accepted, a supplier can transfer the VAT amount from its regular foreign bank account.

The taxable base is compensation received for delivery of digital services to consumers in the territory of Georgia. The VAT rate is 18%.

_________________________________________

For additional information with respect to this Alert, please contact the following:

EY LLC (Georgia), Tbilisi

Document ID: 2021-5784

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more