Georgia has an individual income tax, with rates ranging from 1% to 5.75%, a 5.75 percent corporate income tax rate, a 4% state sales tax rate, a max local sales tax rate of 4.9 percent, and an average combined state and local sales tax rate of 7.35%. The country has one of the least sales tax rates in the United States. However, it gives room for local governments to deduct their added sales tax. As a result, a regular taxpayer has to pay both a state and local sales tax rate, which is around 7.31 percent, according to the Tax Foundation.
Filing taxes
Persons who live in the country for one year have to pay taxes on income provided the following criteria apply to them:
- A federal income tax return must be filed.
- They possess income subjected to the state’s income tax but not the federal income tax
- Income exceeds the country’s standard deduction
Note: Part-year residents have to file their tax returns if they are legal residents, but reside elsewhere for some time.
For non-residents, a tax return is only necessary if they have earned income from a Georgian source. They include wages, lottery winnings, rent, or income from flow-through entities.
Types of Taxes
While income and sales taxes apply to almost all taxpayers, the state also has a 5.75 percent corporate tax rate for businesses operating within the territory, as well as property taxes for real estate. The three main kinds of taxes collected include personal income tax, corporate profit tax, and value-added tax. Other types are property taxes as well as various fees collected such as excise tax, and import tax.
Personal Income Tax
This type of tax is deducted at a rate of 20 percent on locally sourced income. Although foreign-sourced personal income is tax-exempt, the definition of “foreign-sourced” may be misinterpreted. As discovered by further reading the tax code, income from overseas earned through active work while physically present here should be considered a Georgian source even if the income in question was never paid or derived from a foreign source. Interest, dividends, and royalties charge a 5% personal income tax rate.
Georgia personal income tax rates
| Single, married filing separate | Married filing jointly | Tax rate |
| $0-$750 | $0-$1,000 | 1.00% |
| $751-$2,250 | $1,001-$3,000 | 2.00% |
| $2,251-$3,750 | $3,001-$5,000 | 3.00% |
| $3,751-$5,250 | $5,001-$7,000 | 4.00% |
| $5,251-$7,000 | $7,001-$10,000 | 5.00% |
Value Added Tax
18% VAT is applicable. There are a few exceptions granted, as nearly all goods and services are subjected to VAT. Individuals do not pay VAT for medical care, exports, and education services. Despite the turnover, a taxpayer has to register for VAT if he/she produces or brings in goods. However, turnovers less than 100,000 GEL are tax-exempt.
Corporate Taxes
Corporate taxes are taxed at a rate of 15 percent, which was enacted in 2008. Before that, very few deductions were made. This tax system was put up to draw in foreign investors.
Excise taxes
They are imposed on some imported luxury and ecologically damaging goods, such as gasoline, paintings, etc. For some imported goods, customs laws apply to their importation into the country.
Georgia Sales Tax rate
| Georgia sales tax rates | |
| Sales tax rate | National rank |
| 4% | 40 |
Tax Rates
| Corporate Profit Tax | Value Added Tax (VAT) | Excise Tax | Personal Income Tax (for locally earned income) | Tax-exempt (in limited instances) | Import Tax | Property Tax |
| 15% | 18% | Applicable only on a few selected goods | 20% | Tax exempt (in limited instances) | 0%, 5%, 12% | Up to 1% |
