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Jan 15, 2014

Georgia's new tax code is in effect since January 2011


INDIVIDUAL TAXATION

Georgia applies a territorial tax system for individuals. Nonresidents are taxed on their Georgian-sourced income. Married couples are taxed separately. Each registered individual taxpayer must file a separate return but families and married couples may elect file joint property tax returns.

INCOME TAX

Nonresident individuals are taxed at a flat rate of 18% for 2013. The income tax rate will be reduced to 15% in 2014.

RENTAL INCOME
Nonresidents earning rental income is taxed at a flat rate of 18% for 2013.

CAPITAL GAINS
Capital gains realized from sales of properties not connected with business activities are exempt from taxation if the property was held for more than two years before it was sold. Otherwise, capital gains are taxed at 18% for 2013.

Capital gains realized from sales of properties connected with business activities are taxed at a flat rate of 18% for 2013.

PROPERTY TAXATION

Property Tax

Property tax is a local tax levied on the market value of properties, excluding land. The property tax rate varies according to the amount of annual family revenue of the individual. The exact rate within the range is fixed by the local government where the property is located.

PROPERTY TAX

TAX BASE, GEL () TAX RATE
Up to 40,000 (16,807) 0%
40,000 100,000 (42,017) 0.05% - 0.20%
Over 100,000 (42,017) 0.80% - 1.00%
Source: Global Property Guide

The rates are not progressive. The applicable tax rate applies on all property subject to property tax.

Land Tax

Land tax is levied at different rates, depending on the land classification and the location.

For land used for economic activities, including leases), land tax is levied at a flat rate of GEL0.24 (€0.10) per sq. m. The rate is further adjusted by territorial coefficients at a maximum of 1.5.

For agricultural land, land tax rates vary according to the administrative unit and land quality. The tax rate varies from GEL1.50 (€0.63) to GEL100 (€42) per one hectare. The rate is further adjusted by a territorial coefficient at a maximum of 150%.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies is taxed at a flat income tax rate of 15%. Taxable income is calculated as the difference between gross profits and income-generating expenses.






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