Running a business in Georgia has many advantages: a growing economy, a favorable geographic location, and relatively simple tax rules compared to other countries. Still, every entrepreneur – whether local or foreign – must understand how taxation works to avoid mistakes and ensure smooth operations.

In this article, we’ll explore the essentials of the Georgian tax system and highlight what business owners should keep in mind.

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1. Corporate Income Tax (CIT) and the Estonian Model

One of Georgia’s unique advantages is its Estonian Taxation Model, introduced in 2017. Under this system:

Companies do not pay income tax on retained or reinvested profits.

Corporate Income Tax (15%) is only payable when profits are distributed (e.g., dividends paid to shareholders).

This encourages businesses to reinvest earnings into growth rather than immediately paying taxes.

👉 For foreign investors, this model makes Georgia highly attractive, as it improves cash flow and supports expansion.

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2. Value-Added Tax (VAT)

Standard VAT rate: 18%.

Businesses must register for VAT if their annual turnover exceeds 100,000 GEL.

Exported goods and some services are zero-rated, which can be a strong advantage for international trade.

⚠️ Common mistake: Some companies fail to register for VAT on time, which can lead to penalties. Working with an experienced accountant helps avoid this issue.

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3. Personal Income Tax (PIT) and Payroll Obligations

Flat PIT rate: 20% (applies to salaries, wages, and other personal income).

Employers must also contribute to the pension scheme (2% from employee, 2% from employer, and 2% from the state).

💡 This system is simple compared to progressive tax structures in other countries, but it still requires careful monthly reporting.

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4. Other Taxes Businesses Should Know

Property Tax: up to 1% of the average annual property value.

Excise Tax: applies to specific goods such as fuel, alcohol, and tobacco.

Import Duties: generally low, but vary depending on the product.

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5. Why Professional Accounting Matters

Even though Georgia offers a business-friendly tax environment, mistakes can still be costly. Incorrect VAT filings, late declarations, or misunderstanding profit distribution rules may lead to fines.

That’s why many local and foreign-owned businesses in Georgia choose to outsource accounting. A professional accounting partner ensures:

Compliance with Georgian tax laws.

Accurate and timely reporting.

Optimization of tax benefits (especially under the Estonian model).

Peace of mind when dealing with banks and investors.

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✅ Final Thoughts

Georgia provides a unique and favorable tax environment, but success depends on proper understanding and compliance. Whether you’re a startup or an established international company, staying informed – and supported by expert accountants – is the smartest way to grow your business here.

👉 At Intellect Group, we help businesses navigate Georgia’s tax system with clarity and confidence, so you can focus on running and expanding your company.