All about taxes for IT companies in Georgia. Pros and cons, differences in the status of a Virtual Zone and an International company in Georgia
Owners of an IT company in Georgia can get rid of part of taxes! Learn from this article how to get the status of a Virtual Zone or an International Company! Right now, follow the link and find out how these statuses differ, and what are the pros and cons in each of them!
All about taxes for IT companies in Georgia⬇️
Owners IT companies in Georgia, those who have the confirmed status of a Virtual Zone are granted preferential tax regimes. Those who are ready to open a company in Georgia will have a great start. However, such benefits were not provided for foreign companies until last year.
Since 2020 The Government of Georgia has introduced tax preferential regimes for international companies. Next, let's find out the pros and cons of the Virtual Zone and International Company statuses.
IT companies that have the status of a Virtual zone in Georgia
The main advantage of entrepreneurs who have the status of a Virtual zone is the complete absence of value added tax and income tax. Not all IT-spheres fall into this list, but for developers of their own software, graphic designers and those who support the site, you can count on preferential treatment.
To get this status, you need to confirm presence in the country (substance). As a confirmation, they use receipts for the payment of office rent, payment of salaries to citizens of Georgia, expenses for the maintenance of the company on the territory of the country.
Advantages of a Virtual zone for IT companies in Georgia
- Availability of opening a corporate account remotely.
- Simple company registration.
- No income tax.
- No value added tax.
- Reduced tax on dividends.
- There are no restrictions fornon-residents of Georgia.
- Confidentiality and security of data, including financial data.
- Multi-currency account.
- Remote business management in Georgia.
Disadvantages of a Virtual zone for IT companies in Georgia
- A limited number of IT-spheres suitable for the conditions of obtaining the status.
- The absence of taxes is not for all actions of the company.
- To obtain the status, it is necessary to provide already fulfilled obligations characterizing the company's activities.
- The status does not apply to the entire company as a whole, but to a specific type of activity included in the list for obtaining the status.
- The need for analysis before tax exemption. There are tax risks without a preliminary audit.
- Cases of inspection by the Tax Inspectorate of Georgia of companies with the status of a Virtual zone for the control of accrued taxes and detection of tax evasion have become more frequent.
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IT companies with the status of an International company in Georgia
IT is possible for IT companies in Georgia engaged in the production of software, computer games, programming or consulting around the world to obtain the status of an International company.
The list of IT spheres that can receive this status is much wider than for a Virtual Zone.
Advantages of an international company for the IT sector in Georgia
- Reduced income tax up to 5%.
- No taxes on dividends.
- Income tax has been reduced to 5%.
- No value added tax.
- No tax on assets.
Disadvantages of an International company for the IT sector in Georgia
- Work experience of more than two years is required.
- It is necessary to confirm the presence in the country.
- There are no guarantees of full tax exemption.
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