Tax Dispute Resolution in Georgia

A tax dispute in Georgia starts when the Revenue Service issues a decision you disagree with, such as the tax act issued after an audit. The decision can be appealed, first to the Dispute Resolution Council at the Ministry of Finance and then to court. Each stage has a statutory time limit, and the appeal is prepared from the records for the periods in dispute.

What a Tax Dispute Is and When It Arises

A dispute follows a formal Revenue Service decision that you disagree with. A field audit closes with a tax act, the written document that records what the auditors found. A tax act with an adjustment you disagree with is not final and can be appealed through the statutory dispute process.

Two situations are settled without an appeal. A desk audit is run by correspondence, and many go no further, because the documents settle the question or because the taxpayer fixes a mistake and pays the difference. A payment that does not show as received on rs.ge is usually a matching problem, where the payer name or tax ID entered at the bank differs from the one the Revenue Service holds.

An audit does not by itself revoke Small Business Status. The status is affected by what the audit finds, mainly income from an excluded activity or turnover above ₾500,000 in two consecutive years. Once the status is revoked, an appeal does not bring back the 1% rate for that calendar year, and the status has to be applied for again.

How to Appeal a Tax Assessment in Georgia: Stages and Time Limits

An appeal against a Revenue Service decision has two stages, in a fixed order:

1. The Dispute Resolution Council at the Ministry of Finance. The appeal goes here first.
2. Court. A dispute that is not resolved administratively at the Council can be taken to court.

Each stage has its own fixed statutory time limit, counted from the date you received the previous decision. The date you received the tax act starts the limit for the Council, and the date you received the Council’s decision starts the limit for court.

Record the date each decision reaches you, and pass the decision to your representative the same day. The appeal is a formal procedure and has to be prepared from the decision and your records before the limit expires.

Records and Evidence Needed for a Tax Appeal

The Revenue Service’s findings are checked against records made at the time of each transaction. A business that rebuilds a contract or a currency conversion from memory after a request arrives is in a much weaker position than one that hands over the records made at the time.

The baseline is the tax source document under Article 72 of the Tax Code, a category that covers ordinary invoices and receipts. Each one is dated, identifies both parties, describes what was supplied and states its value. Each party holds a matching copy, and the document has to be kept until at least three years after the close of the calendar year it belongs to.

These records are needed in addition to the invoices:

• the contract or engagement terms for each significant invoice
• bank records that date each receipt and show its currency
• travel records, a lease and utility bills, if your position depends on where the work was performed
• your registered activity code and registration papers, to compare with what you invoice
• for a company in a reporting category, its SARAS financial statements and the working papers for them

The Revenue Service cross-references the monthly declarations against VAT positions, bank and payment data, the filings of your clients and suppliers and your own filing history. A client or supplier who reported a transaction differently from you is one of the mismatches that comparison finds.

The ordinary statute of limitations for a tax assessment in Georgia is three years, so an audit can go back three years into declarations that were already filed. Where the Revenue Service has already raised a question about a filing, the records for that year in effect have to be kept until the matter is resolved, even after the three-year minimum has passed. Keep your own log of what was filed and paid each month as well, because a clean month-by-month history is not always easy to export from rs.ge.

Who Can Represent You in a Tax Audit and Tax Dispute

You can have an accountant, a tax adviser or a lawyer act for you for the whole of an audit. In a desk audit the representative answers the correspondence, and in a field audit the representative can attend from start to finish.

A representative does three things:

• answers the Revenue Service’s questions with knowledge of both the Tax Code’s procedure and your bookkeeping
• answers requests for documents completely and on time, because a partial or late answer reads as evasive
• checks that the audit stayed within its procedure

For a field audit, that procedure is:

• written or electronic notice at least 10 working days before the audit begins
• a start within 30 days of the notice being received
• a duration of about three months, with two more months possible if the head of the Revenue Service approves
• findings issued as a written tax act

We represent clients through desk and field audits and correspond with the Revenue Service on their behalf. For the appeal that follows, we tell you at the free consultation who acts for you at each stage. Clients on a monthly accounting package have Revenue Service notifications and requests processed by us as part of the package.

Correcting a Declaration vs Appealing an Assessment

A correction and an appeal are separate procedures.

Question	Correcting a declaration	Appealing an assessment
Who starts it	You, after finding an error in a declaration you filed	You, after receiving a Revenue Service decision
What it addresses	A wrong figure or reporting month in your own filing	A Revenue Service decision you disagree with, such as a tax act
Where it goes	The Revenue Service	The Dispute Resolution Council, then court
Timing	As soon as the error is found	Within the statutory time limit for each stage

A declaration that was already filed can be corrected, and it is better to correct an error yourself before the Revenue Service finds it. An early correction usually means less interest and a smaller penalty than a late one. Typical mistakes are reporting income in the wrong month, converting foreign currency at a rate from the wrong day, and filing the declaration but not paying the tax.

Months that were never filed are a third case. They are filed one by one through accounting restoration, at ₾270 per month of arrears.

Interest and Penalties on Unpaid Tax and Delays to LLC Liquidation

The Tax Code’s general penalty rules apply to a declaration filed late and to tax paid short:

• Unpaid tax carries interest for every day past the due date, until the balance is paid.
• A declaration that reports less tax than was due adds a separate penalty to the shortfall.
• Late filing and late payment are each penalised, and there is no grace period.

All three are automatic, so the amount grows until the balance is paid or the declaration is corrected.

An LLC cannot be struck off while its tax position is open. The registry does not complete the liquidation until the Revenue Service confirms that nothing is outstanding. Unfiled declarations, an open VAT position and a mismatch the Revenue Service has already raised each delay the liquidation. A tax audit running at the same time moves the legal deadline for completing the liquidation to one month after the registry is told the audit has concluded.

Advance Tax Ruling in Georgia: Binding Answer, Fee and 90-Day Response Time

An advance tax ruling, provided for in Article 47 of the Tax Code, gives the Revenue Service’s formal position on how a specific transaction will be taxed before the transaction is carried out. The ruling is in writing and binds the Revenue Service, so the position is not defended later in an audit.

It is a formal application with a fee. The statutory response time is 90 days, and a complex request can take considerably longer in practice.

A ruling suits a significant decision where the tax treatment is unclear, such as a restructuring, a cross-border arrangement or a real estate transaction with an unusual structure. For routine questions that a normal filing already answers, the cost and the waiting time are rarely justified. We prepare the ruling application for clients who need the answer before the transaction goes ahead.

Tax Dispute Resolution Prices

Dispute work is quoted after a free 30-minute first consultation. We do not publish a fixed fee for an appeal, and the quote is made once we have read the decision.

Work	Price	What it covers
First consultation	Free	30 minutes, to read the decision and scope the work
Tax consultation	₾250 an hour plus VAT	Answers to specific questions, followed by a summary in writing
Dispute work	Quoted after the consultation	The review of the decision and the records, Revenue Service correspondence and the appeal work agreed at the consultation

Tax, interest and penalties are paid by you to the Revenue Service and are not part of our fee.

Tax advice is not part of the Lite and Business accounting packages and is charged separately. The Premium package includes 30 minutes a month of senior tax consulting by video call. On every package, liability for a filing error we make is ours, which does not extend to penalties caused by documents that were never sent to us.