Introduction
Revolut’s latest expansion into Spain’s financial system raises concerns for international businesses. The fintech giant has partnered with Spanish tax authorities, allowing users to pay personal and corporate taxes directly through the app. While this simplifies tax payments for Spanish residents, it also signals a shift toward increased financial transparency, which could pose risks for businesses operating across multiple jurisdictions.
This development raises important questions: How much financial data will be shared with Spanish authorities? Could this lead to increased scrutiny and potential tax liabilities in multiple countries? More importantly, how can businesses protect themselves from unintended tax consequences?
Spain’s taxation system is complex, and Revolut’s integration with its tax framework could create unexpected compliance burdens. Unlike Spain, where global earnings are subject to taxation, Georgia’s corporate tax rate offers businesses a more predictable and cost-efficient framework.
Georgia tax residency provides a compelling solution for those seeking a tax-efficient alternative. With low business taxes in Georgia, double tax treaties, and tax-free zones, the country has become an attractive destination for international entrepreneurs. However, navigating tax compliance and structuring business operations efficiently requires expert guidance.
This is where Gegidze comes in. As a leader in corporate tax in Georgia, Gegidze helps businesses mitigate risks, optimize tax structures, and ensure compliance with Georgia’s territorial tax framework.
In this article, we’ll explore how Revolut’s partnership with Spain’s tax authorities could disadvantage international businesses and why shifting to Georgia’s tax system with the help of Gegidze is a smart move.
What Revolut’s Tax Data Sharing Means for International Businesses
Revolut’s decision to partner with Spain’s tax authorities is a significant step in its expansion strategy. While this move simplifies tax compliance for Spanish residents, it raises concerns for international businesses using Revolut for financial transactions. Integrating Revolut’s financial services with Spain’s tax framework could result in more outstanding tax reporting obligations and increased regulatory scrutiny for foreign companies.
Tax transparency has benefits and risks for businesses operating across multiple jurisdictions. On one hand, streamlined tax payments reduce administrative burdens. Conversely, increased financial oversight could expose companies to double taxation risks, unexpected corporate tax liabilities, and potential compliance conflicts.
Increased Scrutiny on International Transactions
Spain enforces a strict tax compliance regime, requiring extensive financial reporting from individuals and businesses. With Revolut now facilitating direct tax payments to Spanish authorities, companies banking with Revolut may face greater oversight.
Businesses that assumed financial privacy when using fintech platforms could now see their transactions subject to cross-border reporting requirements.
If Revolut begins sharing data with Spanish authorities, companies with financial ties to Spain - whether through clients, suppliers, or banking transactions - could be questioned about undeclared income or potential tax liabilities abroad.
The Risk of Double Taxation
Many international businesses structure their operations to benefit from tax treaties that prevent double taxation. These treaties ensure that companies are not taxed twice on the same income. However, Revolut’s alignment with Spain’s tax authorities could complicate how these treaties are applied.
For example, while Georgia’s double tax treaties provide mechanisms to mitigate this, businesses relying on Revolut could still face lengthy compliance disputes, additional withholding tax liabilities, and the administrative burden of proving tax residency.
Compliance Challenges for Businesses Using Revolut
Companies banking with Revolut must now consider how their corporate income tax obligations could shift due to increased transparency. Potential risks include:
Inadvertent tax residency claims: If a company frequently transacts with Spanish entities through Revolut, authorities may argue it has a tax presence in Spain.
Unexpected withholding taxes: Payments from Spanish clients via Revolut may become subject to Spain’s withholding tax regulations, reducing overall profitability.
Additional compliance costs: Increased reporting obligations could require businesses to file tax residency certificates to avoid misclassification.
Exploring alternative financial solutions that align with the territorial tax system and double tax treaties is crucial for businesses seeking tax efficiency.
Why Georgia is an Attractive Alternative for Business Tax Optimization
As international tax scrutiny intensifies, businesses seek jurisdictions offering low corporate tax rates, simplified compliance, and financial privacy. Georgia has emerged as a top destination for companies seeking business-friendly tax policies while avoiding the increasing oversight in countries like Spain.
Georgia is based on a territorial tax system. This means businesses operating in Georgia are taxed only on income generated within the country. For international companies, this distinction offers significant financial and operational advantages.
Georgia’s Territorial Tax System: A Key Advantage
One of Georgia’s most compelling tax benefits is its territorial taxation policy. Under this framework:
Companies registered in Georgia only pay tax on locally sourced income. Foreign-sourced revenue is not subject to corporate tax in Georgia.
Unlike Spain, which imposes taxes on worldwide income, Georgia ensures that businesses are not taxed on profits earned in other countries.
The Georgia corporate tax rate for locally generated income is only 15%, significantly lower than Spain’s 25% corporate tax rate.
Georgia’s system minimizes double taxation risks for international businesses while offering a low-tax environment that supports growth and reinvestment.
Business Taxes in Georgia: Lower Costs, Greater Efficiency
Georgia offers one of Europe and Eurasia's most competitive corporate tax environments. Key advantages include:
0% corporate tax on retained earnings: Businesses are only taxed when they distribute profits as dividends, allowing for tax-free reinvestment.
No capital gains tax for businesses: Unlike Spain, Georgia does not impose capital gains tax on business profits.
No withholding tax on reinvested earnings: Spain applies withholding tax on dividends, while Georgia does not tax undistributed earnings.
Low Georgia business tax rate: In addition to the 15% corporate income tax rate, Georgia also offers lower payroll tax obligations, reducing overall business costs.
Tax Residency in Georgia: A Strategic Advantage
Securing Georgia tax residency provides additional financial flexibility for business owners and entrepreneurs. Benefits include:
Personal income tax at only 20% – significantly lower than Spain’s progressive tax rates, which can reach 47%.
No wealth tax – Spain imposes a wealth tax on high-net-worth individuals, while Georgia does not.
No inheritance tax – Georgia does not tax inherited assets, unlike many European jurisdictions.
Business owners can legally optimize their personal and corporate tax burdens by establishing tax residency in Georgia while ensuring compliance with international tax regulations.
Georgia’s Double Tax Treaties: Reducing Cross-Border Tax Risks
Georgia has signed 58 Double Taxation Avoidance Treaties to further protect businesses from double taxation, including agreements with Spain, the UK, Germany, France, and Italy. For businesses concerned about Revolut’s data sharing with Spanish tax authorities, Georgia’s double tax treaties provide a clear legal framework to avoid unnecessary tax exposure. By structuring operations through Georgia, companies can minimize withholding taxes and avoid overlapping corporate tax obligations.
Tax-Free Zones in Georgia: Full Exemption from Corporate Tax
Georgia offers designated tax-free zones that allow businesses to operate completely tax-free on certain activities. Benefits of setting up in a tax-free zone in Georgia include:
0% corporate income tax for businesses operating in Free Industrial Zones (FIZs).
0% VAT on international trade.
0% import tax when bringing goods into the FIZ.
Spain, by contrast, applies VAT, corporate tax, and import duties on most business activities, making it far less tax-efficient.
Comparing Georgia’s Corporate Tax System vs. Spain’s Taxation Policies
When evaluating the best jurisdiction for business taxation, comparing tax rates, compliance obligations, and overall fiscal advantages is essential. Corporate tax in Georgia is structured to encourage investment and business growth, while Spain’s taxation system is significantly more complex and costly for companies.
By examining the key differences in corporate tax rates, international tax treaties, and trade-related taxes, businesses can make informed decisions on where to structure their operations.
Corporate Tax Rate Comparison: Georgia vs. Spain
Georgia's corporate tax rate is one of the biggest advantages for businesses considering relocation.
Tax Category | Georgia | Spain |
Corporate Income Tax | 15% (only on distributed profits) | 25% (on global income) |
Corporate Tax on Reinvested Profits | 0% | Taxable at 25% |
Withholding Tax on Dividends | 5% (0% in some cases) | 19%-24% |
Capital Gains Tax | 0% | 19%-26% |
Spain’s corporate tax system imposes global income taxation, meaning companies with international earnings must report and pay taxes in Spain, even on revenue generated elsewhere. This can lead to double taxation issues and higher compliance costs.
Additionally, Spain applies corporate tax on reinvested profits, whereas Georgia allows companies to retain earnings without any tax liability until dividends are distributed.
Georgia’s Double Tax Treaties: Avoiding Cross-Border Taxation
For businesses with international clients, double taxation is a significant concern. Many jurisdictions impose withholding taxes on foreign income, leading to situations where profits are taxed twice - once in the country of origin and again in the country of business registration.
To prevent this, Georgia’s double tax treaties:
Ensure that businesses operating in Georgia are not taxed twice on the same income.
Reduce withholding tax rates on international businesses' dividends, interest, and royalties.
Provide legal frameworks for tax residency certification, helping companies prove that their income should not be taxed in multiple jurisdictions.
Spain also has double taxation treaties, but due to its worldwide tax system, businesses operating there often face higher withholding taxes and global income taxation, making tax planning more complicated.
Georgia Import Tax vs. Spain’s Trade Taxation
Import tax policies significantly impact profitability for companies involved in international trade. Georgia offers favorable import tax rates compared to Spain, allowing businesses to save on costs when bringing goods into the country.
Spain applies high VAT and customs duties on imports, increasing the cost of international trade. In contrast, Georgia’s import tax rates are lower, and businesses operating in Free Industrial Zones (FIZs) pay 0% on imports.
For companies engaging in logistics, manufacturing, and international trade, Georgia provides a more cost-effective environment for moving goods across borders.
Simplified Tax Compliance
One of the major challenges businesses face in Spain is the complexity of tax compliance. Spain requires:
Extensive corporate tax filings for companies earning income abroad.
Mandatory VAT registration for many types of business activities.
Strict payroll tax obligations with high employer contributions.
Georgia, on the other hand, offers a streamlined tax system:
Corporate tax filings are required only when distributing profits.
VAT registration is optional unless revenue thresholds are exceeded.
Payroll tax rates are lower, making it more cost-effective to hire employees.
For companies looking for a low-tax, business-friendly jurisdiction, Georgia presents a clear advantage over Spain regarding compliance efficiency and cost savings.
The Risks of Staying in Spain’s Tax System
Revolut’s new role in tax data sharing could lead to:
Automatic reporting of business transactions to Spanish tax authorities, increasing tax audit risks.
Stricter corporate tax enforcement, even for businesses that only operate partially in Spain.
Double taxation issues arise, as Spain’s tax authorities may claim rights over income earned in other countries despite existing Georgia double tax treaties.
This shift could significantly impact operations for businesses that have historically used fintech solutions like Revolut for financial flexibility. Spain’s tax authorities could demand corporate tax filings, enforce withholding tax on cross-border transactions, and impose higher compliance costs.
To avoid these risks, companies should consider transitioning to corporate tax in Georgia, where business taxes are simpler, lower, and more predictable.
Georgia’s low import tax structure also allows businesses engaged in international trade to save on customs duties and VAT, making it an attractive jurisdiction for global operations.
How Gegidze Can Help Your Business Transition to Georgia’s Tax System
Revolut’s partnership with Spanish tax authorities marks a shift in the global financial landscape, increasing tax compliance risks for international businesses.
Georgian framework allows companies to legally optimize their tax exposure while remaining compliant. Gegidze specializes in helping businesses transition to Georgia’s tax system, ensuring seamless setup, tax efficiency, and regulatory compliance.
Gegidze Facilitates a Smooth Transition and Tax Efficiency
As a leader in corporate tax consulting, Gegidze provides businesses with tailored strategies to protect their financial operations. By helping companies establish a secure banking structure outside of high-compliance jurisdictions, Gegidze ensures that businesses can operate efficiently without the risk of unnecessary tax exposure. Services include:
Tax residency planning ensures companies comply with Georgia’s corporate tax system.
Double taxation treaty consultations to minimize risks of dual taxation.
Strategic banking solutions to reduce reliance on fintech platforms that could compromise financial privacy.
As tax regulations become increasingly intertwined with digital banking, businesses must take proactive steps to secure their financial operations.
Moreover, relocating a business to Georgia requires expert guidance to ensure compliance, financial efficiency, and seamless operations. Gegidze provides tailored solutions to help businesses transition while maintaining operational stability and tax advantages.
Corporate Registration & Setup
Assistance with company formation in Georgia.
Choosing between a standard corporate entity or a Free Industrial Zone (FIZ) entity for tax-free business operations.
Ensuring a smooth business bank account setup, minimizing dependency on fintech platforms like Revolut.
Tax Residency & Compliance
Structuring businesses to qualify for Georgia tax residency, ensuring full territorial tax benefits.
Helping companies leverage Georgia double tax treaties to avoid double taxation issues.
Advising on compliance with Georgia’s corporate tax and VAT regulations, ensuring smooth operations.
Banking & Financial Solutions
Identifying alternative banking solutions beyond Revolut, reducing exposure to Spain’s tax enforcement policies.
Guidance on payment processing solutions that align with Georgia’s tax structure.
Ongoing Legal & Accounting Support
Managing corporate tax filings to ensure low tax liability.
Providing ongoing regulatory updates to keep businesses compliant with Georgia’s evolving tax laws.
Avoiding Tax Exposure & Compliance Burdens
For businesses seeking a tax-efficient alternative to Spain, Georgia presents a stable, low-tax jurisdiction that supports global operations without excessive regulatory interference.
With Revolut’s increasing tax transparency requirements, businesses must act proactively to protect their financial interests. Georgia offers the ideal corporate tax structure, and with Gegidze’s expertise, businesses can transition seamlessly and securely.
Frequently Asked Questions (FAQ)
How does Revolut’s tax partnership with Spain affect international businesses?
Revolut’s partnership with Spain’s tax authorities increases financial transparency, leading to greater tax scrutiny and compliance burdens. Businesses using Revolut may face double taxation risks, withholding tax obligations, and unexpected corporate tax liabilities. Shifting to corporate tax in Georgia can help companies mitigate these risks.