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LAW OF GEORGIA
TAX CODE OF GEORGIA

[Only the articles relevant to this dossier have been reproduced here]

Article 261 – Tourist enterprise

1. A tourist enterprise shall be a legal person that builds a hotel, supplies hotel assets/part of the assets to another person (with or without the right to buy back the assets), and on the basis of a commutative contract (including on the basis of a lease, right of use, right of administration, trusteeship, intermediary and/or other contract terms) concluded with the buyer of this property ensures that the hotel assets/ part of the assets are used as hotel rooms/apartments.

2. After the completion of the hotel construction, a tourist enterprise shall:

a) designate a fixed amount of space to be used for hotel rooms/apartments;

b) make sure that during a maximum of 10 calendar years after the acceptance of the building (hotel) for operation, the total (including amounts additionally charged by the tax authority with respect to the given facility in the relevant period) VAT taxable turnover (other than transactions exempt from VAT) from a specific facility (hotel) declared by a tourist enterprise and/or by a person(s) invited under a relevant agreement for the functioning/operation of the facility/part of the facility as a hotel, is not less than the amount obtained as a result of dividing the turnover exempt from VAT with the right of deduction defined by Article 172(4)(v) of this Code as a result of supplying the hotel assets/part of assets by 1.18.

3. The status of tourist enterprise shall be granted to a person by the Revenue Service according to a specific facility (hotel). The Revenue Service may request the tourist enterprise to present guarantees, the value of which must not exceed 18% of the amount obtained as a result of dividing the turnover exempt from VAT with the right of deduction under Article 172(4)(v) of this Code.

4. The procedure for awarding the status of a tourist enterprise to a person, the procedure for its operation and cancellation, as well as the minimum amount of space from the total space of the building to be used as hotel rooms/apartments according to the municipalities shall be determined by the Government of Georgia.

Law of Georgia No 5791 of 13 March 2012 – website, 23.3.2012

Law of Georgia No 6446 of 12 June 2012 – website, 25.6.2012

Law of Georgia No 2946 of 12 December 2014 – website, 24.12.2014

Law of Georgia No 6817 of 14 July 2020 – website, 22.7.2020

Law of Georgia No 6942 of 15 July 2020 – website, 28.7.2020

Article 1332 – Taxation by a tourist enterprise of the income of a natural person who is the owner of the hotel assets/part of the assets

1. Remuneration paid by a tourist enterprise to a natural person under a relevant contract shall be taxed at the rate of 5% of the amount taxed at source.

2. In the case set out in paragraph 1 of this article, the income received by a natural person, which is taxed at source, shall not be included in the gross income of the receiving person and shall not be subject to subsequent taxation.

Law of Georgia No 2946 of 12 December 2014 – website, 24.12.2014

Article 160 – Supply of goods

1. Supply of goods shall be the transfer of the right of ownership of disposing of tangible property. The following shall also be considered the supply of goods:

a) the transfer of the right of ownership of property, for consideration, by a decision of a public authority/municipality body, and/or as provided for by the law;

b) the factual transfer of goods under a rental, leasing or similar agreement, with the right of redemption;

c) the transfer of goods on the basis of an agreement according to which a commission fee is paid when buying or selling goods.

2. Electricity, gas, thermal energy, cooling energy and other similar property shall be considered as tangible property. Money (except for a collectible item and/or a coin with numismatic value), and cryptography currencies (crypto assets) shall not be considered as goods.

3. The following shall also be considered supply of goods for consideration:

a) the free supply of goods by a taxable person if its VAT on the goods or on the related charges has been fully or partially deducted. In addition, the transfer/use of the goods as a sample or a gift of little value shall not be considered supply of goods for consideration;

b) the use by a taxable person of a building/structure of own production as a fixed asset if it would not be able to fully receive the VAT deduction in the case of purchasing the building/structure from another person.

Note: for the purpose of this subparagraph, own production shall mean construction of a building/structure on a plot of land owned by/in possession of the taxable person by own efforts and/or by purchasing construction and installation services;

c) the supply of goods by a taxable person for personal use of its employees or the supply/use of goods for the purpose different from the purpose of its own activity if its VAT on the goods or on the related charges has been fully or partially deducted;

d) the leaving of goods by a taxable person or its successor in title in its own possession after terminating economic activities if its VAT on the goods or on the related charges has been fully or partially deducted;

e) the cancellation of the registration of a taxable person as a VAT payer if its VAT on the goods left on the balance sheet at the time of cancellation of its registration as a VAT payer or on the related charges has been fully or partially deducted;

f) the transfer of goods by an enterprise or an association into ownership of a partner or a member of association respectively in return for a share;

g) the expiry or early termination of the validity period of the status of a tourist enterprise;

h) the shortage provided for by this Code.

4. Supply by a co-owner of an immovable thing of his/her share in the co-ownership shall be considered supply of the immovable thing.

5. If the right of ownership of an immovable thing has been registered on its purchaser in a registration authority with regard to a facility under construction, the construction, installation and/or repair services provided by the supplier of the immovable thing with respect to the supply of this thing shall be considered part of the supply of the immovable thing.

6. Joint supply of a land plot and the attached building/structure shall be considered supply of the building/structure.

7. The following shall not be considered supply of goods:

a) the supply by a taxable person of all assets or its part (independently operable subdivision) to another taxable person;

b) the contribution of an asset into the capital of an enterprise or partnership;

c) the transfer of an asset between persons – parties to the reorganisation of an enterprise.

Note: for the purpose of this paragraph, a person who has received the asset shall be considered a successor in title for the supplier of this asset.

8. Conditions and procedure for the application of paragraph 7 of this article, and cases when the provisions under this paragraph do not apply shall be defined by the Minister of Finance of Georgia.

Law of Georgia No 6817 of 14 July 2020 – website, 22.7.2020

Article 171 – VAT exemption of certain category transactions without the right of deduction

1. The following shall be VAT exempt without the right of deduction:

a) financial transactions/financial services;

b) provision of services with lotteries, gambling and games of chance, except for the service provided for by Article 172(4)(r) of this article;

c) supply of a plot of land;

d) supply of a plot of land and an apartment/dwelling house to a natural person if the supplier supplies this property to a natural person or a first line heir of a natural person:

d.a) from whom he/she has received this property within the measure for securing performance of his/her and/or another natural person’s contractual obligation;

d.b) whose property he/she has purchased by auction or another way for enforcing payment of his/her and/or another natural person’s financial liability;

e) provision of lecture courses through electronic media (disks), which are of educational nature and may also be published in the form of a book;

f) provision of selling services and printing services of goods (magazines, newspapers and printed music) specified under the NCNFEA Codes 4901, 4902 and 4904 00 000 00, and/or provision of advertising services by newspapers and magazines;

g) supply of the property transferred to state ownership, and transfer (supply) of property on lease under the Law of Georgia on State Property;

h) supply of the state property (except for movable property transferred to state ownership) on the basis of privatisation programme;

i) supply of a partnership interest (the right of preliminary registration of title to property) if no property is attached/personified to that interest (right), except where property is transferred into ownership in return for the interest (right);

j) lease of the goods supply of which is VAT exempt without the right of deduction, under this Code;

k) provision of services by passenger vehicles (except for taxis) with regulated prices and rates on urban and intraregional routes;

l) provision of sweeping and cleaning, and waste management services for a municipality on a populated territory;

m) provision of mandatory stamping/marking services of excisable and/or non-excisable goods by a person selected by the Revenue Service under the procedure established by the legislation of Georgia;

n) supply by a natural person of hotel assets provided for by Article 261(1) of this Code/part thereof owned by him/her if a new owner (natural person) takes over the previous owner in a contractual relationship between the previous owner and the tourist enterprise;

o) supply (distribution) by a partnership of property to its member (co-owner) if the members of the partnership are only natural persons, the composition of members of the partnership has not changed from the foundation of the partnership till the moment of transfer (distribution) of property and the partnership is not a VAT taxpayer at the moment of distribution. For the purpose of this subparagraph, when a member of partnership dies, transfer of the partnership interest to his/her heir or sale of the interest of the member of partnership under the Law of Georgia on Enforcement Proceedings shall not be considered a change in the composition of the members of partnership;

p) supply of goods specified under the NCNFEA code 4820 20 000 00;

q) supply of goods by a FIZ enterprise to another FIZ enterprise;

r) provision of services by a FIZ enterprise to another enterprise of the same FIZ;

s) supply of goods originated or manufactured in an occupied territory of Georgia from the occupied territory of Georgia to a person having the status of special enterprise;

t) provision of construction and installation, repair, restoration, research and development and/or geological survey services financed with soft loans for the rehabilitation of the electricity sector issued by the foreign states and/or international organisations under international agreements of Georgia ratified by the Parliament of Georgia;

u) provision of services on the basis of an agreement funded by a foreign organisation for the liquidation of a natural disaster, accident and catastrophe, with the aim of humanitarian aid, and to which an appropriate executive authority of Georgia is a party;

v) supply of goods and/or provision of services related to the equipment and machinery, vehicles, spare parts and materials intended for performing oil and gas operations under the Law of Georgia on Oil and Gas, and for performing operations related to oil and gas for investors and operating companies under agreements provided by the aforementioned Law and/or under licenses granted for performing oil and gas operations;

w) supply of goods provided for by Article 173(a-n) of this Code;

x) provision of easement services free of charge.

2. Supply by a taxable person of the goods that are used by him/her for any activity exempt from VAT under Article 170(1) of this Code or paragraph 1(a) and (b) of this article if the right of VAT deduction has not arisen and/or has not been applied at the time of purchasing the goods shall be VAT exempt without the right of deduction.

Law of Georgia No 6817 of 14 July 2020 – website, 22.7.2020

Law of Georgia No 1024 of 11 November 2025 – website, 14.11.2025

Article 172 – VAT exemption with the right of deduction

1. Supply/provision of the following goods/services shall be VAT exempt with the right of deduction:

a) supply of goods in high sea, or for chargeable passenger carriage, or for commercial, industrial or fishing activities, or for rescue or aid-at-sea operations, or for the provision of a vessel intended for off-shore fishing with fuel or food;

b) supply of goods for the provision of a battleship specified under the NCNFEA Code 8906 10 00 with fuel or food, which leaves the territory of Georgia;

c) supply, remaking, repair, maintenance, freight or lease of a vessel provided for by subparagraph 1 of this article and supply, lease, repair or maintenance of an equipment installed or used on such vessel;

d) apart from services provided for by paragraph 1(c) of this article, provision of other services for immediate need of a vessel under paragraph 1(a) of this article or its cargo;

e) supply of an aircraft with fuel or food;

f) supply, remaking, repair, maintenance or lease of an aircraft, and supply, lease, repair or maintenance of an equipment installed or used on such aircraft;

g) apart from services provided for by paragraph 1(e) of this article, provision of other services for immediate need of a craft under paragraph 1(f) of this article or its cargo;

h) carriage of goods placed under export, re-export, outward processing or transit, or intended for transit (which is confirmed by the documents accompanying goods), and provision of services directly related to the carriage. The services directly related to such carriage shall be as follows:

h.a) during carriage, services related to sending/receiving of cargo and/or vehicles and means of carriage, and services provided by airports, harbours, railway or vehicle stations/terminals;

h.b) air or sea navigation, dispatching and/or information services;

h.c) forwarding services;

h.d) preparation of cargo documents, inspection, examination, transportation processing (including loading and unloading) services, and packing for transportation and storing services;

h.e) agenting services in harbours;

i) provision of passenger and baggage carriage services and of services directly related to the carriage, provided that a point of departure or destination is located outside of Georgia and that a unified transport document has been drawn up for such carriage. Services directly related to such carriage shall be as follows:

i.a) services related to sending/receiving of passengers and/or vehicles, and services provided by airports, harbours, and railway and vehicle terminals;

i.b) air or sea navigation, dispatching and/or information services, and supervision of aero navigation services;

i.c) inspection, examination, transportation processing (including loading and unloading) services, and packing for transportation and storing services;

i.d) passenger ticket sale services for international passenger transportation;

i.e.) passenger services within customs control zones at airports and harbours, the cost of which is included in the price of a passenger ticket of the international transportation;

i.f) agenting services at harbours.

2. Provision of services by an intermediary acting on behalf of another person shall be VAT exempt with the right of deduction, in the case of participation in the transactions provided for by paragraph 1 of this article or in the transactions carried out outside of Georgia.

3. Supply of goods and/or provision of services shall be VAT exempt with the right of deduction if they are intended for the official use by a foreign diplomatic mission or an equivalent representation or for private use by a member of the representation or diplomatic mission (including the family members living with him/her). The procedure for applying the tax privilege under this paragraph shall be defined by the Minister of Finance of Georgia.

4. The following shall also be VAT exempt with the right of deduction:

a) supply of natural gas to thermal power stations;

b) supply of assets by an enterprise over 50% of interest/shares of which is owned by the state and/or a municipality to the state and/or the municipality by withdrawing them from the capital;

c) transfer of goods and/or provision of services to the state and/or a municipality free of charge;

d) transfer of goods by legal entities under public law that implement projects (including of preparatory stage) defined by the international agreements ratified by the Parliament of Georgia, with whom the Ministry of Finance of Georgia has concluded a project implementation authorisation agreement, to other persons under these projects;

e) supply of goods outside of Georgia (export/re-export of goods). In addition, if the goods are to be carried outside of Georgia by a passenger in his/her personal baggage, the tax privilege under this subparagraph shall only be applied when the passenger does not live in Georgia (the place indicated in the passport or another personal identification document provided for by the legislation of Georgia is not Georgia), transportation of goods from Georgia is carried out within 90 days from their supply and the price of goods, including VAT, exceeds GEL 600.

Note: where goods are carried outside of Georgia by the passenger in his/her personal baggage, the procedure for applying the tax privilege under this subparagraph shall be defined by the Minister of Finance of Georgia;

f) before placement of goods under the import, customs warehousing, temporary admission, inward processing or free zone procedure, carriage of goods between the points located within the territory of Georgia and provision of services provided for by paragraph 1(h) of this article and directly related to the above carriage, except for cargo storage services;

g) before admission to the territory of Georgia, carriage of goods placed under the import, customs warehousing, temporary admission, inward processing or free zone procedure from the Georgian customs border to the point of destination specified in the customs declaration and provision of services provided for by paragraph 1(h) of this article and directly related to the above carriage, except for cargo storage services;

h) within the state border of Georgia, supply of fuel, lubricants and other ancillaries intended for the delivery on the board for performing civil air flights and special services (aviation works);

i) provision of transportation, loading, unloading and storage services in relation to empty vehicles (including containers and carriages) used during transportation;

j) when carrying out railway transportation in the territory of Georgia with a carriage/container owned by a non-resident, provision of carriage/container usage service by the non-resident, except for the transfer of carriage/container on lease agreement;

k) when carrying out railway transportation outside of the territory of Georgia with a carriage/container owned by a Georgian resident, provision by the Georgian resident of carriage/container usage services;

l) supply of goods by a person having the status of a special enterprise to the occupied territory of Georgia;

m) supply of Georgian goods to a duty free shop for sale and sale of goods and/or provision of food services at this location;

n) supply of gold to the National Bank of Georgia;

n1) supply of investment gold;

o) organised bringing of foreign tourists in the territory of Georgia by tour operators and supply of tourist products to them in the territory of Georgia;

p) provision of services to a ship when bringing goods into the customs territory of Georgia (namely, provision of hydrographic services by the port, the pilotage service and by the Legal Entity under Public Law within the system of the Ministry of Economics and Sustainable Development of Georgia – the Maritime Transport Agency);

q) supply of foreign goods to a customs warehouse, except as provided for in Article 1641(4) of this Code;

r) provision of services involving lotteries, gambling and other games of chance by a lottery organiser under the Law of Georgia on Organising Lotteries, Gambling and Games of Chance in which over 50% of interest is held by the State;

s) transfer of the property of a person (except for money) to the State, an autonomous republic or a local self-governing unit within the scope of enforcement measures, including tax enforcement measures in favour of the State Budget, republican budget of an autonomous republic or local self-governing unit’s budget, also the sale/transfer of a person’s property for the purpose of collecting penalties imposed under criminal or administrative procedures;

t) supply of agricultural produce produced in Georgia (except for the goods (eggs) provided for under the NCNFEA Codes 0407 11 000 00 and 0407 21 000 00 and the goods specified under the subheading 0207 11 (gallus domesticus – uncut, fresh or refrigerated)) before their industrial processing (change of the commodity code);

u) supply of products obtained from goods fully produced in Georgia that are provided for under the NCNFEA Codes 0201, 0203 11–0203 19, 0204 10 000 00–0204 23 000 00, 0204 50 110 00–0204 50 390 00 (including in a minced/chopped form (forcemeat)), and supply of cheese made as a result of industrial processing of products obtained from animal habitants of Georgia, and supply of goods (shelled nuts) provided for under the NCNFEA Code 0802 22 000 00;

v) supply by a Tourist Enterprise of hotel assets or part of the assets to another person for the purpose of receiving them back. If within two years after supplying the hotel assets or part of the assets to another person the Tourist Enterprise receives the same assets back under a commutative contract, the transaction shall also be VAT exempt with the right of deduction and this shall be a basis for adjusting the amount of the taxable transaction. In that case, the Tourist Enterprise may adjust the amount of the taxable transaction under the procedure established by Article 179 of this Code;

w) gratuitous provision of hotel services (hotel accommodation) for a maximum of 60 days during a calendar year to the owner of the hotel assets or part of the assets by a Tourist Enterprise and/or by the person/persons invited under an appropriate contract to ensure the functioning/operation of the facility or part of the facility as a hotel;

x) international call termination services in a mobile or fixed network in Georgia;

y) for the purpose of processing goods placed under the inward processing procedure, provision of services provided for in Article 6(1)(z1.a), (z1.b), (z1.d) and (z1.e) of the Customs Code of Georgia by a person carrying out the aforementioned procedure (except if the processed goods were subsequently imported);

z) supply of electricity and guaranteed capacity, except for the supply of electricity to a consumer provided for by the Law of Georgia on Energy and Water Supply who purchases electricity for own consumption, and provision of transmission and/or dispatching services;

z1) provision of air carriage and transportation services and performance of special services (aviation works) within the state border of Georgia;

z2) supply of ferrous and/or non-ferrous scrap metals and ferrous and/or non-ferrous metal waste if the party accepting the goods can be identified. In addition, it shall be considered that the person accepting goods has been awarded a VAT deduction according to the accounting period of supplying goods.

Note: the goods specified in this sub-paragraph are exclusive of ferrous castings, ingots, rolls, other raw materials and semi-products of primary conversion that are classified under the NCNFEA commodity items 7201, 7202, 7203, 7205, 7206, 7207 and commodity sub-item 7204 50 000 00;

z3) supply of goods (a book) provided for under the NCNFEA Codes 4901 and 4903 00 000 00, or of an electronic book, and provision of sales and printing services for the goods;

z4) supply of an electric bus specified under the NCNFEA Code 8702 40 000 00 (including an electric minibus);

z5) services provided in relation to the imported goods if the cost of the services is included in the taxable amount defined in accordance with Article 1641(2)(b) of this Code;

z6) supply of goods produced in Georgia and intended for a therapeutic/medical purpose, or supply by a pharmaceutical enterprise of its own pharmaceutical products. For the purpose of this subparagraph, the list of goods intended for a therapeutic/medical purpose and of pharmaceutical products shall be defined by a joint order of the Minister of Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia and the Minister of Finance of Georgia;

z7) in accordance with the Law of Georgia on Reduction of Food Loss and Waste and on Food Donation, free supply (delivery) of food by a participant of the food delivery chain to a charity organisation/a food bank.

5. Supply of goods and/or provision of services and/or importation of goods shall be VAT exempt with the right of deduction if the aforementioned is carried out within the scope of the international agreements ratified by the Parliament of Georgia and that have come into force, and supply of such goods and/or provision of such services and/or importation of such goods under the agreements are VAT exempt.

Law of Georgia No 6817 of 14 July 2020 – website, 22.7.2020

Law of Georgia No 3272 of 15 June 2023 – website, 4.7.2023

Law of Georgia No 3549 of 4 October 2023 – website, 24.10.2023

Law of Georgia No 4022 of 15 December 2023 – website, 28.12.2023

Law of Georgia No 685 of 12 June 2025 – website, 16.6.2025

Law of Georgia No 1061 of 12 November 2025 – website, 14.11.2025

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