Georgia: Taxing of digital services companies begins

Georgia starts taxing digital service companies from October 1st 2021. Georgian tax code established that a taxable person outside of Georgia who provides digital services in Georgia must now pay VAT. These new rules where originally planned to come into effect on July 1st. but they have now been postponed until October 1, 2021.

This concerns taxable persons who are providing digital services and are not established or have no habitual residence or a fixed establishment in Georgia.

Businesses must pay a VAT rate of 18% no later than the last day of the month following the accounting period. At the same time tax returns must be filed no later than the 20th day of the month following the accounting period (quarter).

Definition of digital services:

• Electronically supplied services, which are delivered over the Internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, in particular, videos, music, games or other analogues, through download, streaming or other technology, including for these purposes, texts, magazines, newspapers and books.
• Telecommunication services, relating to the transmission, emission or reception of signals, words, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception, with the inclusion of the provision of access to glob al information networks.
• Broadcasting services, which shall include services consisting of audio and audiovisual content, such as radio or television programmes which are provided to the general public via communications networks by and under the editorial responsibility of a media service provider, for simultaneous listening or viewing, on the basis of a programme schedule

Customer location tracking

Customer location determination is based on variety of different factors such as the bank details of the customers payment method, home address, ip and telephone country code.

Last update: 09/08/2021

Source: Georgian Revenue Service (nr.rs.ge)