able deductions.
Non-residents must pay income tax, but only on income received from Georgian sources. Non-residents who engage in economic activities through a permanent establishment are subject to profit tax on gross income received during the tax year from Georgian sources connected with the permanent establishment, less allowable deductions.
Taxable income is composed of the following:
В· Salaries and wages
В· Dividend, interest, and royalty payments
В· Income from the lease or rental of property
В· Income from the write-off of debts
В· Income received from the supply of goods or performance of services
В· Gains from the sale of assets
В· Income received as a result of the restriction or closing of an entrepreneurial activity
В· Income from the sale of shares in an enterprise
В· Income in the form of insurance payments paid under agreements for the insurance or reinsurance risk in Georgia.
In addition to monetary wages, benefits are considered wage income and are taxable as part of gross income. Generally, benefits are included in income at the market price at the moment of receipt, reduced by any portion of the benefit paid by the employee. These include: use of an automobile for private service; gifts of goods or gratuitous performance of services; educational assistance to the employee or dependents; and employee expenses reimbursed by the employer.
Table 1.4.1.1 shows income tax rates. Income tax on dividends, interest payments, and payments to non-residents are withheld at the source of payment and are subject to different rates. Dividends and interest payments are taxed at the rate of 10 percent. Dividends and interest payments received by physical persons, taxed at the source of payment, are not subject to additional taxation. Further, taxes paid on the first 3,000 GEL of combined interest and dividends may be applied to reduce the taxpayer's tax liability, assuming adequate documentation of the tax payment is provided.
Table 1.4.1.1: Income Tax Rates
Amount of taxable income during the tax year
Tax rate
Up to 200 GEL
12% of the taxable income
201 to 350 GEL
24 GEL + 15% of the amount in excess of 200 GEL
351 to 600 GEL
46.5 GEL + 17% of the amount in excess of 350 GEL
More than 600 GEL
89 GEL + 20% of the am...
