Georgia VAT registration obligations for digital businesses

Georgia harmonized its VAT system with the EU on January 1, 2021. Businesses supplying digital services to consumers in Georgia must collect and remit VAT on these sales.

Apr 16, 2021

Since January 2021 foreign businesses providing digital services to consumers based in Georgia have VAT registration obligations and to collect and remit VAT to the Revenue Service of Georgia.

This date is significant as it was when Georgia officially harmonized its VAT system with the European Union (EU). This means that businesses supplying digital services to consumers in Georgia will now need to collect and remit VAT on their sales to the Revenue Service of Georgia. The current standard rate of VAT in Georgia is 18%. 

Georgia VAT: customer location evidence

The customer’s location may be established if one of the following pieces of location evidence confirms their location as being in Georgia: 

  • The customer’s bank details or the payment provider is based in Georgia
  • The customer’s home address is in Georgia
  • The customer’s IP address is Georgian
  • The customer’s telephone country code of the device used to access the service is Georgian

The pieces of evidence listed above mirror some of those used in the EU’s 2015 VAT changes regarding the cross-border supply of telecommunications, broadcasting and electronic services (TBE).

This is further evidence of the harmonization between the Georgian and EU VAT systems. Unlike the EU, however, we understand that there is no sales threshold in Georgia for digital businesses that are impacted.

'Foreign business registration form'

Affected non-resident digital businesses will have to fill in a special form through the Revenue Service of Georgia’s website.

This form is called ‘Foreign taxable person registration form’ and requires some basic information about the affected digital business such as:

  • Country of residence for tax purposes
  • Their main economic activity
  • Country of residence tax ID number.

Once this form is populated and submitted, our understanding is that the Revenue Service of Georgia will then provide a unique login to registered digital businesses for VAT reporting purposes.

 


The information contained in this publication (“Information”) has been provided to you for general information purposes only and we recommend that you obtain professional advice before acting or refraining from action as a result of the Information. Taxamo accepts no liability for any loss occasioned to any person acting or refraining from action as a result of the Information.