According to Article 951, Tax Code of Georgia, individuals (including natural and legal persons), who are not VAT payers and do conduct one or more than one economic activities that are subject to flat rate income tax.

Types of taxable activities are determined by the Government decree and they include: activities conducted by bakeries and beautiful salons (such as: hair cutting, hair-coloring, curling, make-up, massage, epilation, manicure-pedicure, etc.). (Government decree #415, 29 December, 2010)

The flat rate income tax rate is defined by the Government of Georgia in accordance with by types of activities and may vary from 1 to 2000 GEL per subject to tax. Monthly payable amount of flat rate income tax per bakery equals to 50 GEL throughout calendar month. For services provided by beauty salons monthly payable amount of flat rate income tax per chair/table equals to 50 GEL throughout calendar month. For some particular services, such as manicure and pedicure, monthly payable amount of flat rate income tax per chair/tables equals to 30 GEL. (Appendix 6, Government Decree #415).

Flat rate income tax payers exempted from liability to use cash-registers. (#999 of the Finance Minister, Article 1).

While taxpayer is subject to flat rate income tax, he is not liable to report to tax authority neither income tax nor corporate income tax returns. Simultaneously, taxpayer is exempted from liability to pay current charges. . (#999 of the Finance Minister, Article 4)

Accounting period for flat rate income tax is determined as a calendar month and it is subject to pay before the start of accounting month at rate registered by payment date.

In order to obtain status of flat rate income tax payer, it is required to apply tax authority with request to award such status in any month throughout the year. Tax authority reviews application form and if it meets all requirements stated by the itself, applications formed is filled in completely and data imported in it matches actual data, then tax authority issues certificate of flat rate income tax payer. Taxpayer is considered as a flat rate income tax payer starting from the first day of the month following the month when flat rate income tax payer status has been awarded.

Flat rate income tax payer is entitled to conduct other activities. In that case, income received from these additional activities will be subject to taxation under the general rules.

After determination of activities taxable with flat rate income tax, taxpayer is not entitled to micro /small business status, but status of micro/small businesses that have been awarded before determination of activities taxable with flat rate income tax remain in effect.

If natural person conducts activities other than those taxable with flat rate income tax and meets requirements under the Tax Code of Georgia, then he is entitled to special tax regime (tax system for micro and small businesses) along with flat rate income tax regime. While determining marginal amount of annual gross income receivable from micro and small business activities, income from activities taxable with flat rate income tax are taken into consideration.

If either type of activity subject to flat rate income tax or number of subjects to flat rate income tax is changed, taxpayer is liable to notify tax authority of such changes and request correction of primary application. Starting from the month following the month where correction was made to primary application, flat rate income tax will be imposed in accordance with correction. If the type of activity subject to flat rate income tax is added, then a new certificate is issued to taxpayer and the old one I subject to return to tax authority.

Taxpayer subject to flat rate income tax is not exempted from liability to withhold income tax at source. Accordingly taxpayer becomes liable to file income tax return on the monthly bases.

Taxpayer’s application to move to flat rate income tax regime and also subject to taxation and quantity of subjects to taxation indicated in that application is base for calculation of amount of tax payable. Flat rate income tax becomes subject to imposition starting from month following the month when status of flat rate income tax payers has been awarded.

Taxpayer is subject to flat rate income tax status revocation, if:
a) Taxpayer ends activities that are subject to flat rate income tax;
b) Taxpayer applies tax authority with request to revoke status of flat rate income tax payer;
c) Taxpayer conducts activities other than additional activities allowed by the government of Georgia for taxpayers subject to flat rate income tax;
d) In part of additional activities allowed by the government of Georgia liability to VAT has born or taxpayer voluntarily get registered as a VAT payer.

If any of above mentioned terms to revoke status of flat rate income tax payer has occurred, taxpayer is liable to apply tax authority with request to revoke status of flat rate income tax payer no later than 10 days after one of above mentioned terms occurs.

No sanctions will be imposed on tax payer according to paragraph 7, Article 286, Tax Code of Georgia.

Taxpayer is liable to indicate his as a flat rate income taxpayer’s status while issuing primary tax documents and also the number of certificate issued by the tax authority. In addition, taxpayer is liable to keep the primary document issued either by him or for him.

In case if taxpayer decides to suspend activity subject to flat rate income tax, he should notify tax authority of suspension. Within the period of suspension, no flat rate income is subject to imposition. Once taxpayer resumes activity, he is liable to notify tax authority of resumption and pay flat rate income tax due.

Mentioned penalties will not be imposed towards an individual according to paragraph 7 of article 286 of Tax Code of Georgia.

In the given case, individual should submit three applications and in case if conditions are acceptable, special certificate will be issued, as the fixed taxpayer certificate is issued separately for each address of activities subject to fixed tax. 

Benefits for Personal Income Tax and Corporate Income Tax (Profit Tax) envisaged by Tax Code of Georgia are not considered during fixed tax regime.

In case of changing address for activities subject to fixed tax, taxpayer is obliged to notify the tax authority before change. In addition, old certificate should be returned and new certificate will be issued.

In the given case, the new certificate will be issued and old certificate will be returned. In addition, In case if the type of activity and/or the new object is added, old certificates will remain in force and new certificates will be issued for new type/object of activity.

Taxpayer is entitled to apply to a tax authority for being granted a status of fixed taxpayer, in any month during the reporting year. If the taxpayer meets the requirements established, application is filled completely and the data indicated in it is valid, tax authority shall consider the application and issue the certificate of fixed taxpayer within a reasonable time. The person is considered to have the status of fixed taxpayer and consequently as fixed taxpayer from the first date of the month following the month the status was granted.