How to Avoid Double Taxes in Georgia, Double Tax Avoidance Agreement in Georgia
How can a non-resident of Georgia not pay double taxes? Learn from this article what you need to do to avoid double taxes and what regulates the double tax avoidance agreement in Georgia. Follow the link right now and learn how to run a competent business and earn income in Georgia.
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Non-residents with income in other countries sometimes have to pay double taxes – in the country of residence and in the country of income. Agreements aimed at avoiding such situations help to avoid this.
In Georgia, such agreements have been concluded with 57 countries. In this article we will understand what a non-resident in Georgia needs to do in order not to pay double taxes.
Why Double Tax Avoidance Agreements are needed
To stimulate foreign investment in order to develop the economies of the countries, as well as control tax evasion, agreements on the avoidance of double taxes are being created. When they are in effect, taxes are credited to the account of the source State.
Such an agreement between the countries helps taxpayers avoid double taxes and continue to receive income in Georgia. The text of the agreement also regulates the exchange of information between countries in accordance with international standards.
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Taxes on a transaction with a non-resident
Transactions involving the receipt of services or goods from non-residents of Georgia are subject to withholding tax. At the same time, if there is an agreement to avoid double taxes between Georgia and the country of origin, then this tax is not paid.
The reverse VAT that occurs when purchasing from a non-resident will have to be paid. It is not covered by an international agreement.
Required documents
In Georgia, it is enough for counterparties to submit to the Tax Service a certificate of residence in the country with which an agreement on avoidance of double taxes has been concluded.
This certificate is issued by the Revenue Service of Georgia. It can also be obtained in the country of which you are a resident. There are special ministries and authorities for this purpose.
The certificate has a standard form, although the filling differs in different countries. It operates for only a year.
Is it necessary to prove the authenticity of the certificate
Some countries require mandatory legalization of international documents, while others require an apostille. It depends on whether the country is included in the list falling under the Hague Convention.
For those who are included in this list, it is enough to apostille the available certificates, while the rest require legalization. Georgia has signed the Hague Convention, so the process of proving the authenticity of international certificates is simplified here.
In addition to the apostilled certificate, it is mandatory to have a translation of the document into Georgian, certified by a notary. Only a qualified specialist translator has the right to translate.
Certificate of residence in a country that has an agreement on the avoidance of double taxes in Georgia, It is required to submit every year before April 1, the same period when the annual tax returns are filed and filled out. Do not confuse this with monthly payments that non-residents are required to declare.
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