Services provided by non-residents (except for natural persons, citizens of Georgia) on the territory of Georgia are subject to reverse VAT charge. Tax agent imposes VAT on the amount to be paid for the services provided.

Person is liable to register as a VAT payer voluntarily. Taxpayer will be considered as VAT payer once it applies tax authority for registration, but no later than the date determined for mandatory registration. 

Taxpayer is liable to write out invoice for the services provided after the date of registration.

If the total value of taxable transactions conducted by the taxpayer throughout the 12 months does not exceed 100 00 Gel excluding the VAT amount and since the date of taxpayer’s registration already passed 1 year, it is liable require cancellation of registration.  

In that case, taxpayer is subject to VAT refund only on goods that are not realized at the time of getting registered as a VAT payer.

Free of charge supply of raw materials by the VAT payer company to the other company is considered as a taxable transaction and the value of taxable transaction shall be equal to the market value of a good delivered, but not include the VAT. 

Transaction is subject to VAT credit only when:
a) Goods and/or services are used or will be used in:
a.a) taxable transactions, except for transaction subject to VAT exempt without credit;
a.b) transactions related with re-export and export;
a.c) transactions involving provision of goods outside the country;
     b)  Goods and/or services are used to produce goods and services described in paragraph ``a``. 

Provision of intangible assets by non-resident is considered as taxable transaction, because place of service provision is the place of registration of those receiving the service, in other words Georgia and consequently the price due to pay to non-resident will be subject to reverse-charge VAT  at 18%.

This particular transaction should not be considered as a VAT exempted transaction with credit. The only transaction that is VAT exempted with credit is package tourist services provided to the tourist coming to Georgia on the territory of Georgia and by the local travel agencies.

Value of taxable transaction is determined on the basis of received and owed values of compensation, not including VAT amount and/or breach-of-contract charge.

Buyer, in the column ``amount of tax credit``, on the tax return form filed for February, must input the total value of VAT due calculated for 34 computers, which is equal to 4,284 GEL. 

One can get VAT credit if fixed assets are involved only in transactions:
a) Where taxpayer is due a VAT refund. In that case taxpayer may get VAT credit for fixed assets in full and the amount of VAT credit is not subject to cancelation;
b) Where taxpayer is not due a VAT refund;
c) That may simultaneously be and not to be subject to VAT credit. If it is difficult to separate these two types of transactions then:
c.a) if the total value of transactions, not subject to VAT credit and conducted for the year past, is less than 20% of the annual turnover, than taxpayer is subject to VAT credit in full;
c.b) taxpayer is entitled to VAT credit proportional to the specific weight of the value of taxable transactions subject to VAT credit, conducted throughout the year and reported on the tax return at the end of the year.    
If person was no registered as a VAT payer at the time of putting fixed assets into operation, than fixed assets put into operation after the registration will be no subject to VAT credit. 

Under reverse-charge rules, receipt for payment of VAT is base to claim VAT credit. Tax authority sends notification letter to the taxpayer when transferring tax amount overpaid by each type of tax (including VAT) on the account where VAT’s paid under a reverse-charge rules are accumulated. Notification from Tax authority is base to claim VAT credit.        
 

Sale of 4 houses and lands attached to these houses throughout 48 continuous months each year is not considered as economic activity, therefore sale of one house is not subject to VAT and it is not required to get registered.

In that case VAT paid on cash-register is not subject to refund, as, in accordance with tax legislation, VAT paid on fixed asset that is put into operation is not subject to refund. 

Natural person, renting out house or business office and receiving amount of rent of more than 100 00 GEL throughout 12 continuous months, becomes VAT payer once transaction is conducted.

If person sells his share at 100 000 GEL he is not subject to VAT, since sell of share in capital is VAT exempted.

Debt concession is VAT exempted, since this transaction does not belongs to financial services subject to VAT exemption.

Interest received by natural person is not subject to VAT, since it belongs to financial services subject to VAT exemption.

In order to get registered as a VAT payer, procedure you need to go through is to apply tax authority for registration, also it is possible to send application by mail thought The Georgia Revenue Service’s official website - www.rs.ge.

Incorrectly inputted to an invoice information must be crossed out and correct information added. Adjusted invoice must be signed and imprinted on.

Supply of land and of immovable property erected over the land is considered as supply of building and therefore is subject to VAT.

Recalculation or/and cancelation of the amount of VAT credit takes place based on the specific weight of the value of taxable transactions not subject to VAT credit, conducted throughout the year and reported on the tax return at the end of the year. Also, recalculation or cancelation of the amount of VAT credit is not mandatory if, value of taxable transactions not subject to VAT credit is less than 5% of the amount of total turnover.   

Calculation of reverse-charge VAT amount must be filed to tax authority according to the accounting period where service provision took place. Also, the amount of reverse-charge VAT can be specified if the amount of VAT calculated and reported in previous years is changing. 

One should use VAT invoices that are reflected on VAT returns filed within the 3 accounting periods following the end of the accounting period in which taxable transaction took place or filed no later than accounting period that ends on December of the year in which taxable transaction took place. This restriction does not extend to cases determined in sub-paragraph ``c.b``, paragraph ``7``, article 174 of the Tax Code of Georgia.   

Outcomes of the corrections made to VAT invoice should be imputed into columns ``6`` and ``7`` of the VAT return. When corrections are made to turnover, than the corrected amount of VAT credit should be inputted into columns ``13`` and ``14`` of the VAT return. 

For cancellation purposes, incorrectly filled in VAT invoices (all copies) should be submitted to the Tax Authority by the time taxpayer comes to tax authority office to withdraw invoices but no later than January 15 of the following year.   

Person, conducting economic activities with the total value exceeding 100 000 GEL throughout 12 continuous months, is liable to mandatory registration and he will be considered as a VAT payer once he conducts taxable transaction with total value exceeding 100 000 GEL (including this transaction). Person providing goods only on the territory of special trade zones (except for legal person tenant of trade shop, which sells goods at special trade shops and is independent in complying with tax obligations) is not liable to mandatory registration.
The following transactions/persons are not taken into consideration when determining the liability to mandatory registration:
- Transactions exempted from VAT with credit;
- Transactions exempted from VAT without credit;
- Person having the status of flat rate income tax payer (income received from transactions subject to flat rate income tax).
 

When determining the liability to mandatory registration no transactions exempted from VAT with or without credit are taken into consideration.

Persons producing excisable goods on the territory of Georgia or importing excisable goods, except for cases where import of excisable good is VAT exempted, is liable to register as a VAT payer before he conducts provision of excisable goods.  

Person, transferring ownership of goods to the creditor under the terms of contract is considered as a VAT payer only for the purposes of that particular transaction and is subject to reverse-charge VAT without liability to registration.

VAT invoice is not subject to write out when conducting barter transactions. In that case, reflection of VAT amount due on the provision of goods and services on the tax return is base for VAT credit.

a) Tax invoice;
b) Goods declaration form;
c) Certificate of  payment of reverse-charge VAT;
d) Certificate of payment of VAT paid on temporary importation;
e) Certificate of payment of prices for services determined by the government decree and provided by the LEPL’s. Tariffs of services are subject to VAT credit and are determined either by the law or Government decree;
f) Certificate of payment of VAT on the difference between the purchase value and tariff value of imported goods purchased by the warehouses;
g) In the cases determined under Article 1761 of Tax Code of Georgia – certificate of payment of purchase value of goods and services, where purchase value (including VAT amount) should be indicated. (This rule will be made operational once Government decree on ``rules of taxation and payment in individual cases`` will enter into force).