VAT Registration in Georgia: Thresholds, Obligations, and What to Expect

Value Added Tax (VAT) in Georgia is set at 18% and applies to most goods and services. Whether you need to register for VAT -- and when -- depends on your business revenue.

The mandatory registration threshold is 100,000 GEL in taxable supplies over any consecutive 12-month period. Once you cross this threshold, you are required to register for VAT within the timeframe specified by the Tax Code. Failure to register on time can result in penalties and back-assessed VAT.

You can also register for VAT voluntarily, even if you are below the threshold. This can be advantageous if your business purchases significant inputs that include VAT, as you can reclaim the input VAT through your filings.

Once registered, your obligations include charging 18% VAT on your taxable supplies, issuing VAT invoices through the rs.ge portal, filing monthly VAT returns by the 15th of the following month, and maintaining records that support your VAT calculations.

The most common compliance issues we see are late filings, which trigger automatic penalties even if the amount owed is zero. We also frequently encounter businesses that fail to properly distinguish between VAT-exempt and standard-rated supplies, leading to incorrect returns that attract Revenue Service attention.

For businesses that sell both domestically and internationally, the rules become more nuanced. Exports are generally zero-rated (0% VAT), but the documentation requirements are strict. If you cannot prove that goods left Georgia, the Revenue Service may assess VAT at 18% on those transactions retroactively.

Another consideration is the impact of VAT registration on your pricing. If your clients are mostly consumers (B2C), you effectively need to absorb or pass on an 18% increase. If your clients are other VAT-registered businesses (B2B), the impact is neutral since they can reclaim the VAT you charge.

EFS Group helps businesses navigate VAT registration, set up compliant invoicing processes, and manage monthly filings. We also assist with voluntary deregistration when businesses fall below the threshold and VAT registration no longer makes financial sense.