VAT in Georgia Country 2026: Rates, Registration Threshold & Complete Filing Guide
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VAT in Georgia Country 2026: Rates, Registration Threshold & Complete Filing Guide
VAT in Georgia Country is charged at a standard rate of 18% on taxable goods, services and imports. Businesses in Georgia (the country) must register once taxable turnover exceeds 100,000 GEL (about 34,000 EUR) in any continuous 12-month period, as of 2026. Registered payers file a return and pay monthly, by the 15th of the following month.
That threshold has stayed at 100,000 GEL for many years. Still, confirm it on rs.ge before you plan around it. The 18% rate itself is one of the most stable figures in Georgian tax law.
Most foreign founders meet Georgian VAT in one of three ways. A freelancer's domestic sales cross the threshold. A company pays a foreign supplier and triggers reverse charge. Or an importer clears goods at customs. A German developer billing only EU clients may never register. A Tbilisi café owner almost certainly will. The rules below help you work out which group you are in.
What VAT in Georgia Covers
The Georgian VAT system taxes four kinds of operation at 18%: domestic supplies of goods, domestic supplies of services, imports, and certain services bought from abroad. The Revenue Service (rs.ge) administers it. Customs handles the import side.
The Taxable Operations
Georgian VAT applies when one of these happens inside the country's tax territory:
Supply of goods sold to a buyer in Georgia, including stock transferred for free.
Supply of services where the place of supply is Georgia.
Import of goods, with VAT paid at customs on clearance.
Reverse-charge services bought from a non-resident with no Georgian registration.
The place-of-supply rule decides most service cases. A Tbilisi-based consultant advising a client in Berlin is generally supplying outside Georgia. The same consultant advising a Tbilisi hotel is supplying inside it.
How the Credit Mechanism Works
VAT is a tax on value added, not on total sales. You charge 18% output VAT on your sales. You deduct the input VAT you paid on business purchases. You remit the difference.
Take a furniture retailer that buys stock for 50,000 GEL plus 9,000 GEL VAT. It sells that stock for 80,000 GEL plus 14,400 GEL VAT. It pays the Revenue Service 5,400 GEL, not the full 14,400 GEL.
Your VAT Number in Georgia
Georgia does not issue a separate VAT number. Your existing tax identification number from rs.ge carries your VAT payer status once you register. Clients check that status on the Revenue Service portal before they claim input credit on your invoices.
Who Must Register for VAT in Georgia
The registration test is a rolling one. You count taxable turnover over any continuous period of up to 12 months, not the calendar year. Many founders get this wrong. They wait for January and miss the trigger in October.
How the Rolling Threshold Works
Picture a Ukrainian-owned Georgian LLC selling e-commerce goods locally. It earns 9,000 GEL a month from March. By the end of February the next year, its rolling total passes 100,000 GEL. The obligation arises then, regardless of where the calendar year stands.
What counts toward the total:
Taxable domestic sales of goods and services at the 18% rate.
Zero-rated supplies such as exported goods, in most cases.
Excluded items such as exempt supplies without credit, which generally do not count.
Services supplied outside Georgia sit outside the scope entirely. They do not push you toward the threshold.
The Registration Deadline
Once you cross the threshold, the clock is short. Georgian rules have historically required you to apply within two working days of the transaction that took you over. Check the current wording on rs.ge, because penalties for late registration are significant and revised from time to time.
The application itself runs through the Revenue Service online portal. Status usually activates within a few business days.
Small Business Status Does Not Exempt You
An Individual Entrepreneur with Small Business Status pays 1% turnover tax. That status covers income tax only. If the same entrepreneur sells 110,000 GEL of taxable domestic services in a year, VAT registration still applies.
Our guide to Individual Entrepreneur and Small Business Status explains how the two regimes sit together.
Zero-Rated vs Exempt Supplies
Both categories mean you charge no VAT to your customer. The difference shows up on your purchase side.
Feature | Zero-rated (exempt with credit) | Exempt (without credit) |
VAT charged to customer | 0% | None |
Input VAT on your costs | Recoverable | Not recoverable, becomes a cost |
Typical examples | Export of goods, international transport | Financial services, medical care, education, land sales |
Counts toward 100k GEL threshold | Generally yes | Generally no |
Effect on pricing | Costs stay VAT-free | Hidden 18% built into costs |
Paperwork burden | Export proof and customs documents | Separate tracking if mixed with taxable sales |
Why the Credit Right Changes Your Margins
A Georgian exporter of wine to Poland buys bottles, labels and logistics with VAT added. Because exports are zero-rated, it reclaims that input VAT. Its cost base stays clean.
A private clinic in Batumi pays the same 18% on equipment and rent. Medical services are exempt without credit, so that VAT stays on its books. The clinic prices that cost into every consultation.
When Mixed Activity Complicates Things
Some businesses make both taxable and exempt supplies. A training company might run accredited education courses alongside corporate workshops. In that case, you split input VAT between the two activities.
The rules for apportionment need careful records:
Direct costs for taxable sales are fully recoverable.
Direct costs for exempt sales are not recoverable.
Shared costs such as rent or software get split by a proportion.
Getting the proportion wrong is a common audit finding. A monthly bookkeeping process catches errors before they compound across 12 returns. Our tax accounting and bookkeeping services handle this split for mixed-activity companies.
When Registering Voluntarily Makes Sense
Georgia allows voluntary VAT registration below the threshold. It suits a start-up making heavy upfront purchases, since it recovers input VAT from day one.
It is the wrong choice for a freelancer selling mostly to local consumers. Those buyers cannot reclaim VAT. You would either raise your prices by 18% or absorb the tax yourself.
Reverse Charge and Input VAT Recovery
A Tbilisi software agency pays a US firm for cloud hosting and an Estonian contractor for design work. Neither supplier charges Georgian VAT. The agency may still owe it, through a mechanism called the reverse charge.
How the Reverse Charge Works
When a non-resident supplies services whose place of supply is Georgia, the Georgian buyer calculates the 18% VAT itself. The buyer reports it on its own return as if it were the seller. The foreign supplier never registers or files.
Common triggers include:
Consulting and legal services bought from abroad for use in Georgia
Software licences and SaaS paid to foreign providers
Advertising bought from international platforms
Contractors working for your Georgian business from outside the country
Does It Apply If You Are Not VAT-Registered?
In some cases, yes. Georgian rules have historically required the recipient to account for reverse-charge VAT even without full VAT registration. Confirm with rs.ge how your specific status is treated before you assume you are outside the rule.
Recovering Input VAT
Input VAT is the 18% you pay on business purchases. A VAT-registered business offsets it against the output VAT it charges customers. You only pay the difference to the Revenue Service.
Recovery has three conditions:
A valid tax invoice issued through the rs.ge electronic system
A business purpose linked to taxable or zero-rated supplies
Correct timing, claimed in the period the invoice relates to
A cash receipt alone does not support a claim. If your supplier forgets to issue an electronic invoice, your credit is at risk until they correct it.
Reverse Charge Works Both Ways
For a fully taxable business, reverse-charge VAT is usually neutral. You declare 18% as output tax and reclaim the same amount as input tax in the same return. The net cost is zero.
The trouble starts in mixed or exempt businesses. A company making exempt financial services cannot recover the input side, so reverse-charge VAT becomes a real cost. For a firm paying 10,000 USD a month to foreign vendors, that is an 1,800 USD monthly expense that never comes back.
How to File a VAT Return in Georgia
Georgian VAT returns are filed monthly. The return and payment are both due by the 15th of the following month. A VAT-registered company files 12 returns a year, including months with no sales.
The Monthly Filing Cycle
Issue e-invoices as you sell. Every taxable supply to a business customer needs an electronic tax invoice in the rs.ge system. Issue it within the time the rules allow, not at month end in a batch.
Reconcile incoming invoices. Match supplier invoices in the portal against your purchase ledger. Missing or rejected invoices mean missing credits.
Add reverse-charge amounts. Include VAT on services bought from non-residents during the month.
Calculate net VAT. Subtract recoverable input VAT from output VAT. A positive figure is payable, a negative figure is an excess credit.
Submit the return on rs.ge. Filing happens entirely online through the Revenue Service portal.
Pay the balance. Transfer the amount due to the treasury account by the deadline.
A typical cycle for a 20-invoice business takes 1-2 working days of bookkeeping. Our guide to monthly and annual tax deadlines in Georgia shows how VAT fits alongside payroll and profit tax filings.
Currency Conversion and Invoicing Rules
Georgian VAT is declared in GEL. If you invoice in USD or EUR, convert the amount at the official National Bank of Georgia rate for the relevant date. Using your bank's commercial rate creates small mismatches that add up across a year.
Exporters feel this most. A firm billing 50,000 EUR a month needs consistent conversion dates across invoices, the return and the accounting ledger. Pick one documented method and apply it every month.
Excess Credits and Refunds
When input VAT exceeds output VAT, you carry an excess credit. You can offset it against future VAT or other tax liabilities. You can also seek a refund.
The Revenue Service has offered an automatic refund mechanism for excess VAT credits in recent years. Eligibility conditions and processing times have changed over time. Check the current rules on rs.ge before you plan cash flow around a refund.
Correcting a Filed Return
Errors are fixed with an amended return for the original period, not by adjusting next month's figures. If the correction increases tax due, late-payment interest typically runs from the original deadline. Correcting early limits that interest.
VAT Treatment by Business Structure
Your legal structure changes how VAT reaches you. The table below compares the main options foreign founders choose in Georgia (the country), focusing on VAT behaviour rather than profit tax.
Structure | Typical VAT position | Exports of services | Main VAT trap |
IE with Small Business Status | Registers only above the VAT threshold | Usually outside Georgian VAT if place of supply is abroad | Assuming 1% status replaces VAT duties |
Standard LLC | Registers above threshold or voluntarily | Zero-rated or outside scope with correct documents | Reverse charge on foreign vendors |
Virtual Zone LLC | Qualifying IT services supplied abroad sit outside Georgian VAT | Core benefit of the status | Local Georgian sales remain taxable |
International Company Status | Follows general VAT rules for local activity | Exports usually outside scope | Treating all income as VAT-free |
Exempt-activity company (e.g. financial services) | Charges no VAT on exempt supplies | Depends on supply type | Unrecoverable input VAT |
Picking a Structure With VAT in Mind
A freelance developer from Germany billing EU clients rarely needs VAT registration as an Individual Entrepreneur. Her exports fall outside Georgian VAT, so her taxable turnover stays low. Our breakdown of IE Small Business Status covers the turnover rules that apply alongside VAT.
A software house with Georgian clients faces a different picture. Local sales count toward the threshold, and the business soon registers. Virtual Zone status protects only qualifying IT exports, as explained in our guide to Virtual Zone annual compliance.
Profit tax interacts with these choices too. The corporate income tax guide explains Georgia's distributed-profit model, which affects how VAT costs flow through to dividends.
Deregistering From VAT
VAT registration is not permanent. A business whose taxable turnover falls back below the threshold can apply to cancel its registration. The Revenue Service reviews the request and may apply conditions.
Deregistration has consequences:
Stock and assets on hand may trigger VAT adjustments for input credits already claimed
Customers registered for VAT can no longer reclaim tax on your invoices
Re-registration becomes mandatory again if turnover crosses the threshold later
Deregistering is the wrong move for a company expecting to cross the threshold again within a year. The admin of leaving and rejoining usually outweighs the savings. Weigh the full picture with a tax optimisation review first.
Frequently Asked Questions
How quickly must I register once I cross the VAT threshold?
Georgian rules have historically required an application within two working days of exceeding the threshold. The registration itself is processed online through rs.ge. Missing the window does not delay your liability, because VAT is due on taxable sales from the point the obligation arose.
What happens if I register late?
The Revenue Service can assess VAT on every taxable sale made since you should have registered. You usually cannot recover that tax from customers retroactively, so it comes out of your margin. Late-payment interest and penalties apply on top, with amounts set by the current Tax Code.
Do foreign companies selling digital services to Georgians owe VAT?
Georgia applies VAT to certain electronic services supplied by non-resident providers to Georgian individuals. Affected foreign businesses register and file through a simplified online process. Confirm the current scope and filing frequency on rs.ge, as these rules are newer than the core VAT regime.
Can I reclaim VAT paid before I registered?
In limited cases, yes. Input VAT on goods and assets still held at the registration date may be recoverable if you have valid tax invoices. Services consumed before registration generally do not qualify, so time large purchases after registration where possible.
Does a Virtual Zone company ever charge Georgian VAT?
Yes, on supplies outside its qualifying IT exports. A Virtual Zone LLC selling software services to a Georgian bank, or renting out office space, handles those sales under normal VAT rules. If that local revenue crosses the threshold, the company must register.
How long should I keep VAT records?
Keep tax invoices, contracts and export evidence for the full period the Revenue Service can audit, which has generally been several years. Store them digitally with clear links to each return. An audit three years later will ask for proof of zero-rating on specific invoices.
Can I offset excess VAT credit against my payroll taxes?
Excess VAT credit can generally be applied against other tax liabilities held with the Revenue Service, including income tax withheld from salaries. You request the offset through your rs.ge account. This can ease cash flow for exporters who carry large input credits month after month.
