VAT in Georgia: The 18% Rate and the GEL 100,000 Rule
Georgian VAT starts the moment your taxable supplies pass GEL 100,000, and that total is measured over any 12 consecutive months rather than over the calendar year. Miss the crossing and you owe the tax anyway, out of prices quoted without it. The rate is 18%, the count runs net of VAT, and what registration puts on you starts on the day you cross rather than the day you apply.
- The rate is 18%, and it is the only VAT rate in the Tax Code. There is no zero rate, only exemptions, some of which still leave you the right to credit input VAT.
- Registration is compulsory once VAT taxable supplies pass GEL 100,000 over any 12 consecutive calendar months, and you have 2 business days to apply.
- The transaction that takes you past GEL 100,000 is itself taxed, so the 18% starts with that invoice rather than the next one.
- Exempt supplies are mostly left out of the count, and so are most services billed to business customers established outside Georgia.
- Registered or not, you owe 18% reverse charge VAT on services you buy from suppliers who are not established in Georgia.
- VAT returns are monthly: one return for each calendar month, filed and paid by the 15th of the month after it.
The 18% rate and what it covers
VAT in Georgia is charged at 18%, and it is the only VAT rate the Tax Code sets. It applies to supplies of goods and services made within economic activity in the territory of Georgia, and to imports. There is no reduced rate and no zero rate: what works as a zero rate in other systems appears here as exemption with the right of credit.
A taxable person is anyone who independently carries out economic activity, in any place, whatever the purpose and result of that activity. The VAT chapter defines economic activity for itself, and that definition is the one that decides VAT. It reaches activity carried on under the Law on Entrepreneurs, any supply of goods or services that is neither one-off nor irregular, and property put to use for regular income. Art 158 of the Tax Code carries the wording, and Art 166 the rate.
The rules carry 2 carve-outs that settle borderline cases. Whatever its one-off character, the supply of a non-residential building or structure is always economic activity. An individual placing money on deposit with a bank is not carrying out economic activity at all, and that exclusion sits in Art 9 and applies for VAT as well.
The GEL 100,000 registration threshold
Registration becomes compulsory once your VAT taxable supplies of goods and services over any 12 consecutive calendar months pass GEL 100,000, and you have 2 business days from that day to apply. The 12 months roll forward with every month that ends, so the window that takes you over can start in the middle of one year and close in the middle of the next.
The count runs net of VAT, because the taxable amount is the consideration received or receivable excluding the tax.
The duty to charge VAT starts from the transaction that takes the running total past GEL 100,000, and that transaction is included. Registration is not the trigger. The crossing is, and the tax is due whether or not you applied on time.
There are 3 other routes into registration, and none of them waits for GEL 100,000. Voluntary registration is open at any level of turnover. A producer of excise goods registers before supplying them. A taxable person with a fixed establishment in Georgia owes VAT from its first transaction whatever its turnover.
| Trigger | What the Tax Code requires |
|---|---|
| Taxable supplies pass GEL 100,000 over any 12 consecutive calendar months | Apply within 2 business days of the day the total is passed |
| The transaction that crosses the line | VAT is charged from that transaction, including it |
| Voluntary registration | Allowed at any turnover, on application |
| Production of excise goods | Register before supplying them |
| A fixed establishment in Georgia | VAT from the first transaction, apply by the last day of that reporting period |
Which supplies count toward the GEL 100,000
Exempt supplies
The Code has 2 kinds of exemption. Transactions under Arts 170 and 171 are exempt without the right of credit, so the supplier charges no VAT and cannot credit the VAT on its own costs: financial transactions and financial services, the supply of a plot of land, lotteries and gambling services, and goods used only in exempt activity.
Transactions under Art 172 are exempt with the right of credit. That covers the export and re-export of goods, the carriage of goods placed under export, re-export, outward processing or transit, and international carriage of passengers and baggage under a single transport document where the point of departure or destination is outside Georgia.
Exempt transactions are left out of the threshold count, with 3 exceptions: exempt financial or immovable property transactions that are your main activity, exports of goods, and transactions exempt under Art 172(1) and (2).
Services billed to customers abroad
Who the customer is decides where a service is supplied. Sell to a taxable person and the supply belongs where that customer is established; sell to anyone else and it belongs where you are. Everyone counts as a taxable person here except an individual who is not an entrepreneur. A Tbilisi studio invoicing a company in Warsaw therefore supplies outside Georgian VAT, and that invoice does not move it toward GEL 100,000.
Selling the same service to a private individual abroad puts the place of supply back in Georgia, where the supplier is established, and the invoice counts. The exception is 5 kinds of service that follow the private customer instead: telecommunications, radio and television broadcasting, electronically supplied services, transfers of copyright, patents, licences and trade marks, and advertising. Real estate, events and transport have their own rules again.
Rent, reverse charge and fixed tax income
Residential letting carries no VAT exemption in the Code, and using property to obtain regular income is economic activity, so rent is a taxable supply and rental turnover counts toward GEL 100,000 in full.
Reverse charge VAT you pay as a tax agent does not count toward your own threshold. The threshold measures the supplies you make, while the reverse charge falls on services you receive.
Income from an activity taxed under fixed tax status is left out when working out whether a fixed tax payer has to register.
What registration puts on you every month
Every VAT payer files month by month. There is no quarterly option and no annual one, so each calendar month is a reporting period of its own, with the return and the payment both due on the 15th of the month after it, the same date the withholding and small business returns fall on. VAT has no annual return at all: the 31 March date belongs to income and profit tax.
Tax invoices become your job. A taxable person registered for VAT issues one when it supplies goods or services to another taxable person, and to a final consumer only on request, in writing or electronically. A person who is not registered issues none.
None of this touches profit tax. A Georgian company pays profit tax only when profit leaves it, so a month with a large VAT payment and no profit tax at all is an ordinary month.
Import VAT follows the rules for the import duty, with one carve-out: VAT on goods under HS codes 8401 to 9033 on a list set by the Government is paid within 45 days of release into free circulation.
Crediting input VAT and getting a refund
Only a taxable person registered as a VAT payer has the right to credit input VAT. The credit reduces the VAT you owe by the VAT attributable to the cost components of your own supplies, and the right arises at the moment the duty to charge that VAT arises.
Where the purchase is used in taxable transactions, 4 things are creditable: VAT paid or payable on purchases from another taxable person in Georgia, VAT on transactions treated as supplies, import VAT, and reverse charge VAT you assessed yourself. The document that grounds the credit differs by type: the tax invoice for domestic purchases, the import declaration for import VAT, and, for the reverse charge, the amount shown in your own VAT return.
The credit also reaches purchases behind supplies that carry no Georgian VAT of their own. Purchases used for supplies made outside Georgia stay creditable, as do purchases used for Art 172 supplies exempt with the right of credit and purchases behind financial services supplied to a customer established outside Georgia.
Then the limits. There is no credit on social, entertainment or representation costs unless the supplies made at those events are themselves taxed, none on an invoice that does not identify the seller or covers a fictitious transaction, and none at all once 3 years have passed from the end of the calendar year of the taxable transaction.
Where purchases serve both credit-entitled and other transactions, only the proportional part is credited, on a fraction of annual turnover excluding VAT. If the non-entitled transactions in that pool stay below 5% of total turnover for the calendar year, you credit in full. Fixed asset credit is adjusted over 10 calendar years for immovable property and 5 years for other fixed assets.
When creditable VAT in a month exceeds the VAT you owe, the excess is refundable. It is returned under the general overpayment rule, no later than 1 month after you file the claim, and taxpayers who file electronically can be refunded automatically.
The Tax Code has no qualified VAT payer status: the words appear nowhere in either its Georgian or its English text. Who may credit input VAT and who may claim a refund turns on registration and on the Art 174 to 181 rules.
Say you are registered and March runs like this.
- You invoice GEL 60,000 excluding VAT to Georgian customers, so you charge GEL 10,800 of output VAT.
- You buy GEL 20,000 of goods and services from Georgian VAT-registered suppliers and pay GEL 3,600 of VAT on them.
- You pay a foreign software supplier GEL 5,000 and assess GEL 900 of reverse charge VAT on it in your own return.
You owe GEL 11,700, the GEL 10,800 on your own invoices plus the GEL 900 you assessed yourself. Your credit is GEL 4,500, the GEL 3,600 on domestic purchases plus that same GEL 900, so the reverse charge nets to nothing. You file the March return and pay GEL 7,200 by 15 April.
VAT on services you buy from abroad
Services supplied on Georgian territory by a taxable person who is not established here are taxed by the customer, at 18% of the amount payable for the service. The customer accounts for the tax as agent, and that duty does not wait for a VAT registration.
If you are registered, you declare the reverse charge in your own monthly VAT return, due with payment by the 15th, and the amount shown in that return is itself the ground for crediting it. Where the service serves taxable transactions it is charged and credited in the same return, and it costs you nothing.
If you are not registered, you pay the assessed VAT by the 15th of the month following the reporting period and cannot credit it, because the right of credit belongs only to a registered taxable person. That is 18% added to the cost of every taxable service you buy from abroad.
Exempt services are not reverse charged at all. For the rest the liability arises at the time of supply, unless you pay all or part of the price first, which moves the VAT into the reporting period of that payment. The supplier's invoice date decides nothing.
VAT if you are on the 1% or micro regime
Small business status and VAT registration sit together. The status is open to an entrepreneur natural person, including one already registered for VAT, and the 1% is charged on taxable income under the regime while VAT is charged on taxable supplies. A holder who passes the VAT threshold must register for VAT, and registering does not end the status.
Micro business status works the other way. It cannot be held by a person registered as a VAT payer, and it is revoked when the person registers or when the duty to register arises. The holder still charges VAT under the reverse charge rules at 18% on services received from a non-resident, under the Ministry of Finance order that governs the special regimes.
The fixed income tax on short-term letting of your own housing runs until 1 January 2028 and is open to an individual who is not voluntarily registered for VAT, or whose turnover from that activity in any 12 continuous months stays within GEL 100,000. While it runs, the letting is not a VAT taxable transaction at all.
| Regime | VAT registration | What VAT still applies |
|---|---|---|
| Small business status, 1% | Allowed, and compulsory once taxable supplies pass GEL 100,000 | Full VAT on supplies once registered, plus reverse charge on services bought abroad |
| Micro business status | Not allowed, and the status is revoked on registering | 18% reverse charge on services received from a non-resident |
| Fixed income tax on short-term letting | Closed to anyone voluntarily registered | The letting itself is not a VAT taxable transaction |
Whether a given stream of invoices counts toward GEL 100,000 turns on where each customer is established and on which place of supply rule catches the service, and David Sisvadze sets that out in a written opinion he signs.
The same question decides whether registering voluntarily is worth it. Where your supplies are made outside Georgia, the input VAT on the costs behind them stays creditable, so registration turns the VAT on your Georgian purchases from a cost into a refund.
Cancelling a VAT registration
You can ask the tax authority to cancel your VAT registration once your taxable transactions over the last 12 calendar months, excluding VAT and leaving out exempt transactions on the same basis as the threshold count, do not exceed GEL 100,000, and 1 year has passed since the date of your last VAT registration. Cancellation on your own application takes effect from the first day of the following month.
With your consent the tax authority may also cancel a registration on its own initiative where that test is not met. Registration ends automatically in 3 other cases: liquidation of an enterprise, from the date the register entry is cancelled; death, from the date of death; and the opening of a bankruptcy regime, from publication of the court ruling.
What registering late costs
Nothing about the threshold waits for your application. A business that registers late owes the tax for every month in between, and the Code adds to that.
A return that is up to 2 months late is fined 5% of the tax it declares, and one that is more than 2 months late is fined 10%. Where the return declares no tax, there is no filing fine at all, however late it arrives. Those figures come from the Georgian text of the Tax Code, the authoritative version.
Late payment interest runs at 0.05% of the unpaid tax for each overdue day, and the day of payment counts as overdue. Across a year of 365 days that is 18.25%, and it runs on the tax alone, never on the fines. Breaching the taxpayer registration rules is a separate GEL 500 fine.
The window stays open long enough to matter. An audit reaches back 3 years, and the clock starts at the end of the calendar year the audited period falls in, so a 2026 VAT position is still open until the end of 2029.
The transaction that takes your running total past GEL 100,000 is itself taxable, and none of it is prorated.
Say 11 months of taxable supplies come to GEL 96,000 and the next invoice is GEL 9,000. That invoice carries VAT: GEL 1,620 at 18%, on a figure agreed before VAT was in the picture. Unless the customer agrees to pay it on top, the GEL 1,620 comes out of the margin, and the 2 business days to apply start on the day of that transaction.
Frequently asked questions
What is the VAT rate in Georgia?
18%, and it is the only rate in the Tax Code. There is no reduced rate and no zero rate: supplies that carry no VAT are exempt instead, either with or without the right to credit the VAT on the costs behind them.
When do I have to register for VAT in Georgia?
Within 2 business days of the day your VAT taxable supplies over any 12 consecutive calendar months pass GEL 100,000. The 12 months roll rather than following the calendar year, and VAT is due from the transaction that crosses the line, including that transaction.
Do sales to clients abroad count toward the GEL 100,000?
Most services billed to a business customer established outside Georgia do not, because the place of supply follows the customer and the supply falls outside Georgian VAT. Services to private individuals abroad usually do count, though 5 kinds of service, electronically supplied ones among them, follow the private customer instead.
Can I register for VAT voluntarily?
Yes, at any level of turnover. It pays off where you buy heavily from Georgian VAT-registered suppliers and your own supplies are made outside Georgia, because the input VAT on those costs stays creditable and the excess is refundable.
How do I get a VAT refund in Georgia?
You file a claim for the excess, and the tax authority returns it no later than 1 month after that. The right arises whenever the creditable VAT in a reporting period exceeds the VAT you owe for it, and the excess is treated as an overpayment. Taxpayers who file electronically can be refunded automatically.
Does reverse charge VAT apply if I am not registered for VAT?
Yes. On services bought from a supplier not established here, the duty falls on the Georgian customer whether or not it holds a VAT number. Only 2 kinds of customer escape it: an individual who is not an entrepreneur, and an enterprise in a free industrial zone. An agent who is not registered pays the 18% by the 15th of the following month and cannot credit it.
Is there a qualified VAT payer status in Georgia?
Not in the Tax Code: the words appear nowhere in either its Georgian or its English text. The right to credit input VAT belongs to taxable persons registered as VAT payers, and the refund rules are the same for all of them.
Can a small business status holder be registered for VAT?
Yes, and it becomes compulsory once taxable supplies pass GEL 100,000. The status is available to an entrepreneur natural person including one registered for VAT, so the 1% on income under the regime and VAT on taxable supplies run side by side.
When can I cancel my VAT registration?
Once your taxable transactions over the last 12 calendar months, excluding VAT, do not exceed GEL 100,000 and 1 year has passed since your last registration. Cancellation on your own application takes effect from the first day of the following month.