Georgia's Tax System and Framework in 2025

Georgia continues to stand out as one of the most business-friendly jurisdictions globally, thanks to its streamlined and transparent tax regime. As of 2025, the country maintains a territorial-based taxation system—one of the simplest in the world—characterized by minimal tax categories and nationwide uniformity. Both foreign entities and individuals are subject to the same tax obligations as local residents, ensuring a level playing field. The updated Tax Code of Georgia, which came into force on January 1, 2011, remains the cornerstone of the nation’s fiscal policy. It categorizes taxes into two main groups: national and local. National taxes include personal income tax, corporate profit tax, value-added tax (VAT), excise tax, and import duties. Local taxes consist primarily of property and land taxes, administered at the municipal level with some flexibility in rate-setting.

Main Taxes and Current Rates

Personal Income Tax

In Georgia, personal income tax applies to both Georgian nationals and foreign individuals earning income within the country. An individual is considered a tax resident if they spend 183 or more days in Georgia during a calendar year. Additionally, high-net-worth individuals may be classified as tax residents under specific legal criteria. The personal income tax structure is progressive depending on income type, ranging from 4% to 20%. Employment income is taxed at a flat rate of 20%, collected monthly through employer withholding. Other types of income such as interest, dividends, royalties, and licensing fees are taxed at a preferential rate of 5%, making Georgia particularly attractive for investors and digital nomads.

Corporate Profit Tax

A significant reform introduced in January 2017 reshaped how companies pay profit tax, drawing inspiration from Estonia’s innovative model. Under this system, businesses are only taxed when profits are distributed—meaning retained earnings are not subject to corporate profit tax. This incentivizes reinvestment and long-term growth. The standard rate remains at 15%. It's important to note that this favorable treatment does not extend to financial institutions regulated under Georgia’s Law on the National Bank, including commercial banks, insurance companies, credit unions, microfinance organizations, and lenders. The rule applies exclusively to resident companies and non-resident private equity funds operating in Georgia. Domestic firms are taxed on their global income upon distribution, while foreign enterprises are taxed solely on profits derived from Georgian sources—unless exempted under a double taxation avoidance agreement (DTAA) with their home country. Over 70 such treaties are currently active, enhancing cross-border investment security.

Value-Added Tax (VAT)

VAT in Georgia is applied uniformly at 18% on both domestically produced goods and imports, reinforcing fairness across markets. Businesses are required to register for VAT if their turnover exceeds 100,000 GEL within any consecutive 12-month period. Exports, re-exports, international transportation, tourism-related services, and certain other sectors benefit from a 0% VAT rate, promoting external trade. Meanwhile, financial services, insurance, and oil and gas extraction activities are fully exempt. A notable advantage for investors is the refund mechanism: VAT paid on capital assets, construction projects, or export-related expenses can be reclaimed within 1 to 6 months. Excess input VAT can also be offset against other tax liabilities, improving cash flow efficiency for growing enterprises.

Excise Tax

Excise duties apply to both locally manufactured and imported consumable goods. The primary targets include alcoholic beverages, tobacco products, passenger vehicles, and exported ferrous metals. These taxes aim to regulate consumption while generating revenue from luxury or environmentally impactful items. Importers and producers must comply with strict reporting standards, and rates vary based on product category and specifications—for example, higher levies on stronger alcohol or larger vehicle engines. Equal treatment ensures no competitive disadvantage between domestic and foreign suppliers.

Property Tax

Property tax in Georgia is classified as a local tax, giving municipalities limited discretion to adjust rates within nationally defined limits. It covers various asset classes used for economic purposes, including real estate, cars, boats, aircraft, and helicopters owned by individuals. Both individuals and legal entities are liable for taxes on agricultural and non-agricultural land, including state-owned land under usage rights. Rates differ by asset type and location; however, the maximum tax on business-held properties cannot exceed 1% of the assessed value. This moderate burden supports urban development without discouraging ownership or investment.

For multinational employers or expatriates navigating these regulations, partnering with a reliable overseas HR solutions provider can streamline compliance. SailGlobal offers tailored support in payroll management, tax advisory, and cross-border employee integration—ensuring smooth operations in Georgia’s dynamic market.