Georgia’s tax system for individuals encompasses income and property taxes, forming a foundation for both economic growth and compliance. Knowing how these taxes apply to residents and non-residents is essential for effective tax planning.
Income Tax: Who Pays and How?
The Georgian Tax Code identifies two categories of taxpayers:
- Residents: Taxed on their global income.
- Non-residents: Taxed only on income sourced within Georgia.
Residents calculate taxable income by subtracting allowable deductions from their total annual income. For non-residents with a permanent establishment in Georgia, the tax base includes Georgian-sourced income linked to the establishment, while unrelated income is taxed at the source without deductions.
Tax Exemptions: Reducing the Burden
Georgia offers numerous exemptions to support individuals and communities, including:
- State benefits such as pensions, scholarships, and alimony.
- Medical benefits and aid from charitable organizations.
- Up to 6,000 GEL annually for individuals with disabilities or health injuries tied to international peacekeeping operations.
- Specific exemptions for veterans and residents of highland settlements on income up to defined limits.
When multiple exemptions apply, taxpayers benefit from the highest available relief.
Tax Rates and Deadlines
Georgia applies a flat tax system for income:
- 20%: General taxable income.
- 5%: Rental income or proceeds from selling residential property, land, or vehicles.
Tax declarations must be filed by April 1 of the following year, with payments due on the same date.
Property Tax: Local Obligations
Property tax is a local tax imposed on real estate, vehicles, yachts, and other assets. Rates depend on family income:
- Families earning up to 100,000 GEL: 0.05%–0.2%.
- Families earning over 100,000 GEL: 0.8%–1%.
Certain assets, such as inherited property or homes owned for more than two years before sale, are excluded from the family income calculation. Families earning less than 40,000 GEL annually are exempt from property tax. Declarations must be submitted by November 1, with payments made by November 15.
Eurofast’s Expertise
Georgia’s tax laws are designed to balance obligations with opportunities. At Eurofast, we help individuals navigate the complexities of income and property taxation while leveraging available reliefs and exemptions. Our tailored advice ensures compliance and optimizes your financial planning.
For further inquiries, please, contact us at tbilisi@eurofast.eu