New Tax Code for Georgia in January 2017

A draft law on modifying Georgia’s income tax rules will come into force in January 2017 instead of July 2016, taking into account requests from local businesses to postpone the enactment of new Tax Code law.

Today Georgia’s Finance Minister Nodar Khaduri announced the new Tax Code law would enter into force in January 2017, allowing businesses time to "better prepare” themselves for the new law.

Now businesses will have time to minimise the potential risks they would face if the law came into force this July,” Khaduri said.

The Georgian Government planned to make the new law operational from July 2016 however local business representatives argued this was not enough time for them to prepare and adjust to all the changes.

Georgia’s Finance Ministry listened to their concerns and postponed the date when the new Tax Code law will be enforced.

Georgia’s new Tax Code will be implemented in three stages.

Firs stage – Changes will be applied to Value Added Tax (VAT). Imported goods will be exempt from VAT, which will simplify tax administration. The change will become operational once the new Tax Code law comes into force.

Second stage – Income tax will be replaced by profit-sharing tax, which will enter into force from January 2017.

Third stage – Changes will apply to the financial sector from January 2019.

The Government of Georgia started working to simplify the country’s Tax Code after Georgia signed its Association Agreement (AA) deal with the European Union (EU) in mid-2014.

Since then Georgia’s economic team has worked to improve the country’s investment climate, attract more investors and additional capital to the country.