Georgia to implement reform on VAT returns in 2018

Georgia’s economic team is working on a new reform that will further improve the country’s tax legislation and will result in additional surplus capital for the country.

Within the reform a special system will be created wherein entrepreneurs will not have any additional bureaucracy-related challenges. Thanks to the system, entrepreneurs will be able to pay VAT returns in 5-7 business days by filling out an electronic application.

As a result of the implementation of this reform, in the next few years, an additional 600 million GEL will be available in the private sector, which will be an important stimulus for business development’, said Georgia’s Finance Minister Mamuka Bakhtadze, who spoke in front of the hearing of several parliamentary committees today, prior to tomorrow’s vote of confidence from parliament for the country’s renewed cabinet.

Bakhtadze stated that the timely and simple return of VAT surplus without any bureaucracy-related challenges is "especially important” for small and medium businesses.

The Parliament of Georgia approved a new, simplified and liberal Tax Code in 2016, however the country’s economic team continues to further modify the tax legislation. The amendments in the law are created to align Georgia’s tax system with the Estonian Taxation Model.

Following the Estonian taxation model, VAT returns are covered if there is a surplus of VAT inputs over outputs.

Bakhtadze promised the reform on VAT returns will be implemented in Georgia "starting from next year”.