Category: Georgia

What international freelancers can enjoy and should pay attention to in Georgia

The announcement of the Minister of Economy and Sustainable Development of Georgia on the government’s initiative regarding letting international freelancers visit Georgia for a long term and legally work from here appeared a few days ago.
The requirements for the freelancers will be the following: filling in a quite simple application form, providing certain information ahead (personal information, employment/service contract, consent letter for passing the mandatory quarantine) and taking 14 days’ quarantine at their expense.
For resident natural persons ordinary taxation is 20% of personal income tax in Georgia. However, some people can enjoy 1% or even 0% tax in many cases.
For example, a Georgian tax resident must be physically present in the country for more than 183 days within 12 consecutive months while the 183rd (and next) day(s) fall within this concrete calendar year.
Totally, tax treaty network the Georgian is pretty wide (56 treaties).
1% tax:
A “Small Business” status belongs to a taxpayer receiving income up to 500,000 Georgian Lari (GEL-approximately 165 000 USD) per calendar year. He gets a proper certificate and enjoys a tax rate of only 1% on gross revenue.
You can also establish a company (in one day with no minimal capital requirement) and pay 0% corporate income tax if you reinvest profit in Georgia.
Worldwide taxation is not applied to natural persons in Georgia, but not any income paid from abroad is necessarily considered as being produced outside of Georgia.
For example, dividend received from a non-Georgian company, interest paid by non-resident operating abroad pensions received from outside of Georgia, capital gains from selling a share in a non-resident company (unless most of the assets of this company are immovable properties located in Georgia), profits from reselling crypto-currency will be regarded as non-Georgian (exempt) incomes.
Also, a low cost of living, friendly people, good weather, amazing nature, delicious food and wine, and enjoyable social life make Georgia an affordable country.
It is possible to rent a nice, small flat for ~300 USD and work from here or from a co-working space, also for a very affordable price.
Nevertheless, persons (natural and legal entities) providing services from Georgia abroad might have problems with VAT. It is so, because many countries (including the EU) treat services provided abroad as export-exempted from VAT with right of VAT deduction. Georgia implements this rule only in certain types of activities, listed in article 166, subparagraph “D” of the Georgian tax code.
It needs to know that the VAT (and Reverse VAT) rate is 18% in Georgia, and the registration threshold is 100,000 GEL of taxable transactions per 12 calendar months. VAT does not apply to employment income.

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