VAT (value added tax) is one of the first topics a new business in Georgia has to understand. Register too late and you may face penalties; register without need and you take on extra reporting. This guide explains in plain language who must register, when, and how the process works.
What is VAT in Georgia?
VAT is a tax added to the price of most goods and services. In Georgia the standard rate is 18%. A VAT-registered business charges VAT to its customers, pays it to the state, and can usually deduct the VAT it paid on business purchases (input VAT).
Who must register for VAT?
Registration is mandatory when your taxable turnover over the previous twelve consecutive months exceeds the registration threshold, which is currently GEL 100,000. Taxable turnover includes sales of goods and services subject to VAT, and also exports and other zero-rated supplies. Always confirm the current threshold on the Revenue Service website (rs.ge), because rules can change.
- Limited liability companies (LLC) and other legal entities
- Individual entrepreneurs
- Foreign businesses that supply taxable goods or services in Georgia
Voluntary registration
You can also register before reaching the threshold. This is useful if most of your customers are VAT payers or if you buy a lot of goods and want to recover input VAT. The cost is more paperwork and monthly VAT returns.
How to register
Step by step
- Check your turnover for the last twelve months.
- Submit the registration through your account on the Revenue Service portal (rs.ge).
- Keep your accounting and electronic invoices in order from the first day of registration.
- File VAT returns on time every month.
Exports and zero-rated supplies
Exported goods are generally taxed at a 0% VAT rate. This means you charge no VAT to the foreign customer but can still recover VAT on your purchases. To benefit, you must keep proper export documents, so make sure your customs paperwork is complete.
Common mistakes
- Counting turnover incorrectly and missing the moment the threshold is crossed.
- Issuing invoices with wrong or missing VAT details.
- Deducting input VAT without proper supporting documents.
- Filing late or forgetting zero returns.
Frequently asked questions
Do I need VAT registration if my turnover is below the threshold?
No, it is voluntary below the threshold. Whether it is worth it depends on your customers and your purchases.
Can I recover VAT paid on purchases before registration?
Usually not automatically. The rules are specific, so ask an accountant before you rely on it.
What happens if I register late?
You may be required to pay VAT you should have charged, plus penalties. Check your turnover regularly.
If you are unsure whether your business must register, MITC accountants in Georgia can review your situation and handle the registration and monthly reporting for you.
This article is general information and not a substitute for professional advice. Verify current rates and thresholds on rs.ge.
Read the full VAT guide: VAT in Georgia: rate, threshold and filing.
