Georgia decriminalises certain economic crimes, liberalises tax code

Amendments to Georgia’s Tax and Criminal Codes have just come into play, with the main goal to decriminalise economic crime and liberalise the tax code in order to further develop the Georgian economy.

Specifically, from July 13 the following amendments applied to Tax and Criminal Codes:

• Criminal liability for actions that are only tax offence with its content will be abolished;
• Offenses relating to trademarks and marking of non-inaccurate goods are exempted from criminal liability;
• The tax liability has increased from 50,000 GEL to 500,000 GEL;
• Postponing of payment for one month will be possible without submission of a claim to a tax authority;
• The limit for imposing criminal liability for reducing tax has increased from 50,000 GEL to 100,000 GEL;
• The tax incentives period for delayed construction that started in 2008 will be extended to two years;
• Entrepreneurs affected by the natural disasters will be able to annual the destroyed commodity-material values without any fine.

The amendments also include significant incentives for individual sectors, such as aviation, for instance. To this end, the amendments exempt excise duty aviation fuel intended for domestic flights from the VAT, also exempting different air transportation services.

Special incentives are also introduced to apply to owners of micro power stations.

Tax Code amendments and decriminalisation of economic offenses was one of the key promises under the economic component of the Government’s four-point reform plan.