VAT Registration and Monthly VAT Returns in Georgia

VAT in Georgia is 18%. Registration becomes mandatory once taxable turnover passes ₾100,000 in any 12 months, but reverse VAT on services bought from abroad applies long before that, and reclaiming VAT on local purchases needs a separate status that registration does not include.

VAT Rate in Georgia and Who Charges It

The standard rate is 18%, charged on goods and services supplied in Georgia. A VAT-registered business adds 18% to its prices, collects it from customers and pays the Revenue Service the difference between what it charged (output VAT) and what it paid on its own purchases (input VAT).

Registration is not tied to a legal form. An individual entrepreneur, an LLC and a Virtual Zone company can all end up VAT registered, and the rules apply the same way to each. VAT is also separate from corporate tax: a company can be VAT registered and owe no corporate tax for years if it never distributes profit.

VAT Registration Threshold and Deadline

Registration becomes mandatory once taxable turnover exceeds ₾100,000 in any continuous 12-month period. The 12-month period is rolling, so a business that exceeds ₾100,000 in October counts its turnover back to the previous October, not to 1 January.

Once you cross it, the application to the Revenue Service is due within 2 working days. A business that checks its turnover once a month can cross the threshold mid-month and miss that window before the next reconciliation.

Certain VAT-exempt transactions are excluded from the count, so the running total to watch is taxable turnover, not total revenue.

Voluntary VAT Registration

You can register before the threshold forces it. It makes sense in three cases:

• your costs carry a lot of Georgian VAT you would like to reclaim, as with an importer buying stock locally
• your main clients are VAT-registered businesses that prefer to see VAT on your invoice
• you spend heavily on services from abroad and want reverse VAT to net to zero

Below those cases, most small service businesses wait for the threshold.

Reverse VAT on Services Bought From Abroad

When you buy a service from a supplier outside Georgia, such as a software subscription, cloud hosting, a foreign contractor or an overseas marketing agency, you are responsible for the Georgian VAT on it. You declare and pay 18% of the value of the service, whether or not your own turnover is anywhere near the threshold.

An individual entrepreneur on the 1% regime can therefore owe VAT without being registered for it. The 1% tax applies to the income you invoice, reverse VAT applies to the services you buy from abroad, and both apply at the same time.

What happens next depends on your status:

Status	Reverse VAT declared	Cash effect
Not VAT registered	18% of the service value, by the monthly deadline	Paid in full, a real cost
VAT registered	The same 18%, in the monthly VAT return	Usually claimed back as input VAT in the same return, so nothing is paid

Reclaiming Input VAT With Qualified Status

Registering for VAT does not give you the right to reclaim VAT paid on purchases in Georgia. The Revenue Service grants two tiers.

Plain registration lets you charge output VAT and offset reverse VAT against it. Qualified VAT status is a separate approval, granted after a verification process, that lets you deduct VAT paid to Georgian suppliers against what you owe. It requires active trading in Georgia with Georgian customers.

A business that registers and assumes the second tier came with it can spend months paying 18% on office space, equipment and local subcontractors with no way to claim it back. If you buy meaningfully from Georgian suppliers, apply for Qualified Status at the same time as VAT registration. We prepare the case and handle the Revenue Service communication for ₾315.

VAT on Exports and Services to Foreign Clients

Services supplied to a client outside Georgia typically fall outside the scope of Georgian VAT, so no 18% is added to the invoice. The income is still declared in the ordinary monthly filing, and reverse VAT on what you buy from abroad still applies.

The Tax Code splits exemptions into two categories, and the difference is whether you keep the right to reclaim input VAT.

Category	Examples	Input VAT reclaim
Exempt without credit	Financial services, medical care, education, funeral services, land sales	No
Zero-rated	Exports of goods, certain international transport	Yes

A Virtual Zone company shows how the rules combine: its exported IT income is exempt from VAT, but it still has to register if its other Georgian revenue crosses the threshold, and reverse VAT still applies to the services it buys from abroad.

A non-resident company with no establishment in Georgia that sells digital services to Georgian consumers has had separate registration rules since October 2021. It registers through a dedicated portal, whatever its turnover, and reports quarterly.

Monthly VAT Return: Deadline and Contents

A VAT-registered business files a VAT return by the 15th of each month, covering the output VAT it charged, the input VAT it reclaims and any reverse VAT for the month. It sits alongside the income or corporate declaration, as one more return in the monthly declaration cycle.

VAT is recorded at the taxable moment, which is the earliest of three events: the goods or services being delivered, the invoice being issued, or an advance payment being received. An invoice issued on 28 June for work delivered that day belongs to June’s return even if the client pays on 9 July.

An individual entrepreneur with Small Business Status can no longer keep only invoices and receipts once a VAT obligation arises. From that moment, proper accounts of income and expenses are required, as they are for an LLC from incorporation.

VAT Deregistration

Voluntary deregistration is available once at least a year has passed since registration and taxable turnover over the preceding 12 months has stayed under ₾100,000. Registration also ends automatically on liquidation, and the Revenue Service can cancel it with the taxpayer’s consent, effective from the first day of the following month.

Common VAT Mistakes and Penalties

Four mistakes are common:

1. Not declaring reverse VAT on foreign software and contractors.
2. Crossing ₾100,000 without noticing, and applying after the 2 working days have passed.
3. Assuming registration includes Qualified Status, and paying VAT on local purchases that cannot be reclaimed.
4. Putting an invoice in the month it was paid, not the month the work was delivered or invoiced.

VAT is declared and paid on the same cycle as every other Georgian tax, so the same penalty rules apply. Interest accrues daily on an unpaid balance from the deadline, and understating the tax in a return carries a separate penalty on top of the shortfall.

VAT Accounting Prices

VAT-registered businesses are on the Business package. The Lite package is not available once you are registered for VAT.

Transactions a month	Business package
Up to 10	₾315
11 to 30	₾495
31 to 60	₾855
More than 60	Quoted

The package includes VAT registration, the qualification interview if one is required, the monthly VAT returns and input VAT reclaim, along with the rest of your monthly filing. The Qualified Status application is a ₾315 add-on, listed with the other one-off services. All prices exclude 18% VAT.