outputs (sales) less the total (allowable) VAT paid on its inputs (Purchases) during that month. VAT paid on inputs can be credited against VAT paid on outputs if inputs are used for economic activities (offset for charities, entertainment, representative expenses are not allowed) and the enterprise has an invoice of paid VAT. VAT paid on exempt goods or on automobiles cannot be offset. If the input tax exceeds the output tax, the enterprise receives a credit for the excess. VAT on taxable imports is levied and collected by customs agencies.
The VAT rate in Georgia is 20 percent. A zero percent rate applies to exports and the categories of goods and services identified below. Annex D provides a list of VAT exemptions.
Exemption means that producers or suppliers of exempt goods and services do not charge VAT on their output, but cannot claim a credit on the VAT paid on inputs used to produce the exempt output.
Social Taxes . Social taxes include both social and employment taxes and are imposed on monetary and non-monetary wages and other forms of compensation paid to employees, as well as on income earned by physical person entrepreneurs from their economic activities. The social tax rates are summarized in Table 1.4.1.3.
Table 1.4.1.3: Social Tax Rates
Taxpayers
Taxes Paid by Employers and Entrepreneurs
Taxes Paid by Employees
Social Tax
Employment Tax
Social security Tax
Physical person entrepreneurs and legal persons who pay wages to employees.
Physical person entrepreneurs and legal persons who pay physical persons for services.
27%; not less than 16 GEL per month
1%
Physical persons who receive remuneration as employees or on a contract basis.
1%
Physical person entrepreneurs.
27%, not less than 16 GEL per month
1%
Physical persons who carry out non-entrepreneurial economic activities in Georgia.
27%, not less than 16 GEL per month
1%
Source : Tax Code. ...
