Annual Tax Return in Georgia: A Checklist for Business Owners

Every business registered in Georgia is required to file an annual tax return (profit tax declaration) with the Revenue Service. The standard deadline is April 1 of the following year. Missing this deadline results in penalties, and incorrect filings can trigger audits. Here is a practical checklist to ensure your annual return is complete and accurate.

1. Reconcile your books. Before you can file an accurate return, your bookkeeping must be current and reconciled. This means all bank transactions are recorded, all invoices are accounted for, and your profit and loss statement matches your actual financial activity for the year.

2. Review your revenue recognition. Ensure that all revenue earned during the tax year is properly recorded in the correct period. Revenue received in advance or invoiced but not yet collected still needs to be assessed for proper tax-year attribution.

3. Verify your deductible expenses. Not all business expenses are tax-deductible. Georgian tax law has specific rules about what qualifies. Entertainment expenses, fines and penalties, and certain related-party transactions may not be deductible or may have limitations. Review each category against the Tax Code provisions.

4. Calculate depreciation correctly. Fixed assets must be depreciated according to the rates prescribed by Georgian tax law. There are specific asset groups with defined depreciation rates, and using incorrect rates will result in either overpaying tax or understating your liability.

5. Account for any tax credits or incentives. If your company has Virtual Zone status, Free Industrial Zone benefits, or other incentives, ensure these are correctly reflected in your return. Misapplying incentives is a common audit trigger.

6. Prepare your transfer pricing documentation. If you have transactions with related parties -- including foreign parent companies, subsidiaries, or entities with common ownership -- Georgian transfer pricing rules require documentation that these transactions were conducted at arm's length.

7. Review withholding tax obligations. If you made payments to non-residents during the year (dividends, interest, royalties, service fees), verify that withholding tax was properly assessed and remitted. Georgia's tax treaties may reduce the withholding rate, but you need proper documentation to apply treaty benefits.

8. Compile your financial statements. The annual return requires financial statements prepared according to Georgian accounting standards or IFRS, depending on your company's size and type. These must be consistent with your tax return figures.

9. File on time. The annual profit tax declaration is due by April 1. Filing electronically through rs.ge is the standard method. Late filing penalties apply regardless of whether tax is owed.

10. Keep records for five years. Georgian tax law requires businesses to retain all financial records, invoices, contracts, and supporting documentation for a minimum of five years from the end of the tax year.

EFS Group prepares annual tax returns for businesses across Georgia. We start the process in January, ensuring that by the time the deadline arrives, your return is reviewed, accurate, and submitted -- with no last-minute surprises.