VAT in Georgia: the 100,000 GEL threshold, rates and filing

VAT is the tax growing companies stumble over most often. Not because it is complicated, but because the duty to register arrives suddenly: turnover crosses the threshold mid-year and only a few days remain to react.

Key parameters

When registration is mandatory

Mandatory registration

The duty arises when taxable turnover exceeds 100,000 GEL over any 12 consecutive months. It is a rolling period, not a calendar year, and that distinction matters: a company can stay under the threshold in every calendar year and still be required to register.

Voluntary registration

Below the threshold registration is optional, and sometimes worth it.

• your customers are VAT-registered and recover input tax;
• you have large purchases whose input VAT you would like back;
• you export: zero-rated exports allow input VAT to be recovered;
• counterparties require VAT-registered status as a condition of working with you.

Rates

Standard, 18%

It is charged on top of the price: 1,000 GEL net plus 180 GEL of VAT gives 1,180 GEL payable. Treating the 18% as sitting inside an already agreed price costs you the difference out of your own margin.

Zero rate, 0%

• exports of goods;
• international transport;
• certain services to non-residents.

Zero-rating is not the same as exemption. At a zero rate you charge no tax but keep the right to recover input VAT. An exemption removes that right. For exporters the difference means money returned rather than money lost.

Recovering input VAT

A registered payer reduces the tax due by the VAT on business purchases. The right rests on the document: a correct tax invoice with all required details. Part of the input tax is never recoverable.

• entertainment expenses;
• passenger vehicles, unless that is the core business;
• purchases made for exempt activities.

Filing

The return is filed monthly by the 15th of the following month and covers output tax, input tax and the difference. If output exceeds input, the difference is paid by the same deadline. If input is greater, the excess can be carried forward or claimed as a refund.

Returns are filed for months with no activity too. A nil return is still a return, and missing it is penalised the same way.

The usual mistakes

• missing the moment the threshold was crossed, so the duty exists but the registration does not;
• incomplete invoice details, which forfeits the input VAT;
• charging 18% on exports that are zero-rated;
• mixing personal and business spending — VAT on personal items is not recoverable;
• missing the filing deadline when no tax was due anyway.

If turnover is approaching the threshold, it is worth preparing ahead rather than at the moment of crossing. We track our clients' turnover, handle VAT registration and file monthly with RS.ge.