There are only six taxes in Georgia, of which five (Personal Income Tax, Corporate Income Tax, ValueThere

are only six taxes in Georgia, of which five (Personal Income Tax, Corporate Income Tax, Value Added Tax, Excise Tax and Import Tax) are nationwide, and one (Property Tax) is a local tax. There are no capital gains, inheritance, wealth, property transfer, social, branch remittance, or other taxes imposed in Georgia. Added Tax, Excise Tax and Import Tax) are nationwide, and one (Property Tax) is a local tax. There are no capital gains, inheritance, wealth, property transfer, social, branch remittance, or other taxes imposed in Georgia. Personal Income Tax - 20% Personal Income Tax for Micro Business - Exempt Personal Income Tax for Small Business - 3% or 5% (If a Small Business has documented expenses (other than salary expenses) up to 60% of its total income, it is subject to taxation at 3%. Otherwise, it is taxed at 5% rate.) Corporate Income Tax - 15% Value Added Tax - 18% Excise Tax - Varies Import Tax - 0%, 5% or 12% Property Tax Corporate Up to 1% Property Tax Leasing Companies Up to 0.6% Property Tax Individual Up to 1% Property Tax Land Varies Based on the application filed to the GTA, the status of Micro Business can be assigned and respective certificate issued to an individual who: conducts certain economic activities independently without hiring employees receives annual income not exceeding GEL 30,000 maintains inventory balance not exceeding GEL 45,000 undertakes activities that are not banned for Micro Business as defined by the Government of Georgia. The status of Micro Business is cancelled for the current tax year if: any of the above requirements for Micro Business are violated an individual with the status of Micro Business applies to the GTA for cancellation of this status an individual with the status of Micro Business applies to the GTA for assigning the status of Small Business an individual with the status of Micro Business registers for VAT. Tax Benefits and Compliance Micro Business is exempted from personal income taxation. Micro Business shall keep all primary tax documentation. The rules of tax compliance for Micro Business are the same as for individuals with the exception of Micro Business operating in the territory of Special Trade Zone. The latter is exempted from obligation to file personal income tax return and pay tax, but the Special Trade Zone Organizer9 bears this tax compliance obligation on behalf of a Micro Business. However, an individual with Micro Business status shall file the property tax return to the GTA himself/herself. An individual files a personal income tax return and pays tax accrued by the moment of

cancellation of the status of Micro Business within 30 calendar days from cancellation of the status. Based on the application filed to the GTA, the status of Small Business can be assigned and respective certificate issued to an individual entrepreneur who: receives annual income from certain business activities not exceeding GEL 100,000 maintains an inventory balance not exceeding GEL 150,000 is not a registered VAT payer undertakes activities that are not banned for Small Business as defined by the Government of Georgia has not been penalized for not using a cash machine more than three times during a calendar year. The status of Small Business is cancelled for the current tax year if: any of the above requirements for Small Business are violated an individual entrepreneur with the status of Small Business applies to the GTA for cancellation of this status an individual with the status of Small Business registers as a VAT payer. An individual entrepreneur may re-obtain the status of Small Business for the year, that follows a 12 month period from cancellation of this status, if his/her total income for this 12 month period does not exceed GEL 100,000 and he/she is not a registered VAT payer. Tax Benefits and Compliance A Small Business is liable for personal income tax at a 5% rate. The applicable personal income tax rate further reduces to 3% if the Small Business has documentary proof of expenses (except salary expenses) related to the receipt of income in the amount of 60% of total income. Small Business should keep all primary tax documentation. However, they may keep records of expenses in the simplified register according to the rules defined by the Minister of Finance of Georgia. Small Business is not entitled to loss carry forward. Upon cancellation of the status of a Small Business, an individual entrepreneur: may record the balance of inventory in the respective document at its market price, but only up to GEL 30,000 and such document qualifies as a documentary proof for tax deduction purposes shall include the value of the balance of inventory in the total income may credit VAT on the balance of inventory if he/she registers as a VAT payer and the documents backing VAT recovery are present. Losses may not be carried back. The rules of tax compliance for Small Business are the same as for individual entrepreneurs, with the exception of a Small Business operating in the territory of the Special Trade Zone. As in the case of Micro Business, the tax obligations (except property tax compliance) of a Small Business operating in the territory of this Zone will be fulfilled by the Special Trade Zone Organizer. A Small Business is liable to make advance tax payments by 15 of the month following each quarter. Further, a Small Business has no obligation to withhold taxes on compensation payments for received services and salary payments in the amount not exceeding 25% of its total income. Income exempt from corporate income tax includes Income received from IT technologies produced by a Virtual Zone Person (A legal entity having obtained a status of Virtual Zone Person and conducting IT activities) and supplied outside of Georgia