Georgia makes it easy to open a company. Taxes are low. The rules are clear. But the moment money starts moving, things get serious. You’re expected to track every transaction, report it properly, and file on time. Miss a deadline or misreport your numbers, and you’ll face penalties. No warnings. No exceptions.

We’ve worked with hundreds of founders, locals, and foreigners, who assumed bookkeeping here was just a formality. It’s not. The Revenue Service expects clean books, proper documentation, and accurate compliance. That’s true whether you’re running an LLC out of Tbilisi or managing cross-border operations from Batumi.

This guide is for you if:

You’ve already registered your company and need to get your books in order
You’re hiring or invoicing clients and are unsure how payroll or VAT works.
You’re still forming your business and want to start clean.

If you're still in the formation stage, check our Company Formation Guide to learn how accounting relates to registration.

What You Need to Know About Accounting & Bookkeeping in Georgia

If you’ve opened a business in Georgia, accounting and bookkeeping aren’t just back-office admin. They’re the foundation for staying legally compliant, avoiding penalties, and proving your numbers to the Georgian tax authority.

Most business owners find this out the hard way: the Revenue Service doesn’t care if you’re new, your accountant “missed something,” or didn’t know the rule changed last year. Once registered, you must file on time, report accurately, and return everything with accurate documentation.

So let’s break down what you need to do.

What bookkeeping looks like in Georgia

Bookkeeping here isn’t about spreadsheets. It’s about maintaining a financial trail that the government can verify. That includes:

Recording every transaction - sales, purchases, salaries, dividends, loans, and capital contributions
Keeping original invoices and receipts - either digital or printed, but correctly dated and categorized
Tracking monthly obligations like VAT, payroll, and withholding taxes
Generating income statements and balance sheets
Submitting annual tax returns, typically using Form 500

It doesn’t matter how small your company is. If you’re earning or spending, you’re required to report.

Georgia’s accounting standards

Georgia aligns with international practices. Most companies follow IFRS for SMEs, while larger entities or those with international stakeholders may be required to follow full IFRS. These aren’t guidelines they’re mandatory standards. And the Georgian Revenue Service enforces them.

That’s why most businesses use accounting software or work with local professionals. Manual tracking or DIY spreadsheets won’t hold up during a tax review.

Who needs a professional accountant?

If you’re:

Registered and active with a Tax ID
Paying salaries to freelancers
Issuing client invoices
Importing/exporting goods or services
Applying for VAT refunds or managing corporate tax in Georgia

…you need accurate bookkeeping. This applies whether you’re a freelancer operating under a simplified regime or a foreign-owned LLC managing dividends.

Even minor issues—like issuing an invoice without proper formatting or mixing personal and business expenses—can trigger delays, tax disputes, or rejection of your Georgia tax return.

Don’t delay after company formation.

A common mistake? Waiting until year-end to think about taxes. From the moment you register your company, your reporting obligations begin. You’ll need to open a bank account, register with the tax office, and submit initial declarations even if your business hasn’t generated revenue yet.

Business Formation & Tax Setup in Georgia

Starting a business in Georgia is fast. But if you skip the right setup steps, especially around taxes and reporting, you’ll later encounter problems, such as bank blocks, tax fines, or rejected filings.

Let’s examine what actually happens during company formation in Georgia and how it affects your accounting and tax obligations.

Step 1: Registering the legal entity

Register your company with the National Agency of Public Registry to operate legally in Georgia. Most entrepreneurs choose an LLC. The process is quick, usually 1 to 2 business days, and can be done remotely with a power of attorney.

You’ll receive:

A company registration number
Access to the company register of Georgia (public info about your business)
A certified charter (your founding document)

Step 2: Getting your Tax ID

After registration, your next step is to secure a Georgia tax ID number (TIN). The Revenue Service issues this number, which is used for all tax filings, payroll declarations, VAT returns, and correspondence with the government.

Without a TIN, you can’t:

Hire employees legally
Open a business bank account.
Issue valid invoices
Pay or file Georgia business taxes.

They can handle this process if you’re working with an accountant or tax agent. But don’t assume it happens automatically after registration. You need to apply separately.

Step 3: Choosing the proper tax regime

Georgia offers several tax models. What you choose affects your reporting:

Small Business Status: For individuals earning under 500,000 GEL/year. You pay 1% or 3% on revenue without corporate tax. Freelancers and sole traders often use this regime.
Standard Corporate Model: For LLCs and other entities. You only pay 0% on retained earnings and 15% corporate tax when profits are distributed.
VAT Registered Entity: Required if your turnover exceeds 100,000 GEL in 12 months.

Choosing the wrong regime or ignoring registration thresholds can result in penalties, especially if you fail to charge VAT or file payroll.

Step 4: Activating the online tax portal

Once registered, you’ll get access to the Georgia tax center, an online platform where you file returns, view obligations, and track communications. It’s not optional. All filings are submitted through this system, including:

Monthly declarations
Form 500 (annual return)
Payroll and withholding tax statements

If you’re not sure whether you’re registered correctly, use the Georgia business entity search to confirm your company status and check for any tax alerts.

When you skip or delay these steps, the problems don’t show up immediately but always do.

Corporate Taxes in Georgia (2025 Update)

Georgia’s corporate tax system is simple, on paper. But you must understand how it works before distributing profits or making tax assumptions.

Unlike most countries, corporate tax in Georgia isn’t based on profit. It’s based on distribution.

Georgia’s Estonian-style model

Since 2017, Georgia has used a profit reinvestment model. If your company earns profit but doesn’t distribute it, leaving it in the business, you don’t pay corporate tax.

When you distribute profit (as dividends, bonuses, or non-deductible expenses), you owe 15% corporate income tax.

This applies to:

Dividends to owners or shareholders
Personal expenses recorded as business costs
Loans to individuals or affiliated entities (in some cases)

What changed in 2025?

Starting January 1, 2025:

Audit thresholds have been updated: Medium-sized companies must conduct annual audits if revenue exceeds 3 million GEL.
The tax authority now applies stricter rules for disguised distributions, such as inflated service payments to related parties.
Digital businesses and remote companies are being flagged more often for residency reviews and tax residency enforcement.

If you’re unsure whether your expenses could be treated as disguised distributions, it’s safer to check no, not after you’ve been assessed.

Common mistake: assuming 0% means no tax

One of the most common mistakes business owners make in Georgia is assuming that “0% tax on profit” means they’re off the hook. It doesn’t. Even if you don’t owe corporate tax immediately, you’re still legally required to keep proper books, file monthly and annual reports, declare distributions, and maintain supporting documentation. The tax office doesn’t need a reason to request an audit, they just need to see inconsistencies.

If you distribute profit, even informally, it’s taxable.

Filing Requirements: Georgia Tax Return

Filing a Georgia tax return isn’t something you leave until the end of the year. Once your company is registered and active, you’re expected to file monthly and annually, whether you’ve earned income or not.

What are you required to file?

Every active company in Georgia is required to submit:

Monthly declarations for VAT (if registered), payroll, and any withholding taxes
An annual corporate income tax return, even if no distributions were made

The main form for the annual return is called Form 500. It covers your company’s financial activity and profit distributions and calculates your corporate tax liability based on the Georgia tax code.

When is Form 500 due?

Form 500 must be submitted by April 1st following the end of the calendar year. So your deadline for the 2024 tax year is April 1, 2025. If you’ve made any taxable distributions, the 15% Georgia corporate income tax is due by the same date.

Miss the deadline, and you’ll face automatic penalties, usually a fixed fine, plus interest on unpaid tax. There’s no grace period, and extensions aren’t common.

What happens if there’s no activity?

If your company didn’t operate during the year, no income, expenses, or bank movements, you still need to file a “zero” declaration. The system expects it. Failing to file at all signals non-compliance, which may lead to fines or a flagged account at the Revenue Service.

How do you file?

All filings are done through the official online portal of the Georgia tax center (rs.ge). You need your company’s tax ID, an active user account, and access to the electronic signature system. Most businesses work with a licensed accountant or tax agent who handles this directly.

If you’re managing your filings independently, you must keep close track of deadlines and declarations throughout the year, not just in March.

Next, we’ll examine how tax rules change if you're a small business or an LLC and what that means for your reporting and compliance.

Small Business Taxes and LLC Taxation in Georgia

Not every company in Georgia is taxed the same way. What you owe and how you file depends on your structure, revenue, and tax status. If you’re a small business or an LLC, your obligations may be lighter, but they’re not automatic. You have to register correctly to qualify.

Here’s how it breaks down.

Small business status (1% or 3% tax)

You can apply for small business status if you're an individual entrepreneur (not an LLC) and your annual turnover is below 500,000 GEL. This regime lets you pay just 1% on gross revenue. If your income exceeds the limit, the rate rises to 3%.

This model is ideal for freelancers, consultants, and solo operators, but you must register with the tax office to get this status. If you don’t, you’ll be taxed under the standard rules.

It’s also important to know that even small business taxpayers must keep records, issue invoices, and file monthly declarations.

LLC taxation: not flat, not automatic

If you operate under an LLC, you’re taxed under Georgia’s standard corporate tax model. That means:

0% tax on retained earnings
15% tax on distributed profit
Mandatory monthly filings (even with zero activity)
Annual submission of Form 500

Your company must also report any salaries paid, pay employer contributions, and file withholding taxes. This applies even if you're the only employee.

Property tax and other local obligations

Some businesses are also subject to Georgia business personal property tax, for example, if you own vehicles, equipment, or office space. This is assessed at the municipal level, and rates vary by region. If you’ve registered your company with fixed assets, your accountant should include this in your annual planning.

Whether using the simplified regime or a full LLC, the tax office expects clear records, on-time declarations, and accurate reporting. Getting it wrong can disqualify you from favorable rates or lead to penalties.

Payroll, Withholding, and Employment Taxes in Georgia

If you’re paying employees in Georgia, even one, you’re officially an employer. That means you have monthly obligations to the Georgia tax authority, and skipping them leads to automatic penalties.

Many foreign business owners miss this step because labor costs are low and local hires often prefer informal arrangements. However, the Revenue Service doesn’t care about informal matters. If someone works for you regularly and receives money from your business, you’re responsible for withholding and filing taxes.

What taxes apply to employee salaries?

Georgia has a flat personal income tax rate of 20%, which is withheld by the employer and paid directly to the tax office. This amount comes out of the employee’s gross salary, not on top of it.

In addition, employers pay a 2% pension contribution (with the employee contributing another 2%). Enrollment in the pension scheme is mandatory if the employee is a Georgian citizen or permanent resident.

Registration and reporting

Before paying anyone, your company must complete Georgia withholding tax registration. This registration links your business to the monthly salary tax declaration system and ensures you're authorized to deduct and report taxes on behalf of employees.

Each month, you’re required to:

Report salaries paid
Withhold and transfer the correct taxes.
File a payroll declaration via the Georgia tax center.
Pay the pension contribution.

You'll pay fines and interest if you're late, even if the delay was just a few days. This also applies if you’re paying foreign contractors based in Georgia. The rules vary depending on residency status, but the responsibility to declare is still yours.

Hiring locally is smart, but only if you do it by the book.

VAT and Sales Taxes in Georgia

In Georgia, VAT is the main form of indirect taxation, not traditional sales tax. But if you’re doing business here, especially across regions or borders, you must understand how and when it applies.

VAT basics

Value Added Tax (VAT) in Georgia is charged at a flat rate of 18%. If your business sells goods or services and earns over 100,000 GEL in any rolling 12-month period, you’re legally required to register for VAT.

Once registered, you must:

Charge 18% VAT on all eligible sales
Issue invoices in the correct format
Submit monthly VAT declarations to the Georgia tax authority.
Pay any VAT owed by the 15th of the following month.

This is not optional. You risk fines and backdated tax liability if you hit the threshold and don’t register. You can also voluntarily register before reaching the threshold, which is typical for B2B service providers working with VAT-registered clients.

Sales tax by county

Georgia (country) doesn’t have a U.S.-style sales tax by county, but municipal charges may apply depending on where your business is located. For example, property owners or businesses with local licenses may face small levies set by local authorities. These aren’t part of VAT but can appear during tax clearance or business licensing processes.

Double-check with your accountant about local reporting rules if you’re selling physical goods or managing logistics across regions. Don’t assume that VAT covers everything.

Intangible and import taxes

If your business sells digital products or software licenses, you may also be subject to intangible tax Georgia rules. These rules apply in certain B2B cases and are treated similarly to VAT for cross-border service transactions.

Georgia import tax and VAT are typically assessed at customs for goods brought into the country. If you’re importing, you’ll need to account for these costs in your pricing and ensure they’re reflected in your accounting system.

Common Tax Compliance Mistakes in Georgia

Most penalties we see don’t come from fraud or aggressive tax planning. They come from small oversights, missed deadlines, wrong codes, or not knowing the system. If you're doing business in Georgia, especially as a foreigner, you must understand what gets flagged.

Here are the most common compliance mistakes we deal with.

1. Delaying accounting setup

Too many businesses treat accounting and bookkeeping in Georgia as an afterthought. They register a company, open a bank account, and start trading without setting up a system for documentation, reporting, or tracking VAT thresholds.

That quickly creates problems. Monthly declarations are required even if you have no income. Wait too long, and you’ll end up submitting late filings with missing invoices, which puts you at risk during an audit.

2. Misunderstanding residency rules

Tax obligations don’t just depend on where your company is registered—they also depend on where you’re considered a tax resident. If you spend more than 183 days in Georgia, you may trigger Georgia tax residency, even if your company is foreign-owned.

Failing to consider this can affect:

How is your global income is taxed
Whether your foreign company owes taxes locally
Whether you're required to file a personal Georgia tax return

3. Not registering for withholding

You're noncompliant if you pay salaries or contractors and haven’t completed withholding tax registration. And no, having a local accountant doesn’t automatically fix this; they need to file on your behalf using your company’s login and tax identification number (Georgia TIN).

4. Mixing personal and business expenses

Another issue that troubles companies is treating business accounts like personal wallets. If the Revenue Service finds non-deductible personal expenses logged as business costs, it will count them as profit distributions, which means they’re taxed at 15%.

5. Missing silent deadlines

Even if your company had no activity, you must file monthly “zero” declarations and an annual return. Georgia doesn’t chase you. They assume you're either compliant or in violation. If you’re late, the system automatically applies penalties.

Avoiding these issues starts with structure. Clean books, clear roles, and a basic understanding of the Georgian system.

Navigating Georgia’s Business Environment

Georgia’s appeal isn’t just low taxes, it’s a streamlined business environment built for growth. If you’re operating here, you’ll likely interact with banks, lenders, and public institutions that directly affect how your business runs.

Business banking in Georgia

If you’ve registered a company, you’ll need a local account. Most businesses choose TBC Bank, Bank of Georgia, or Liberty Bank. All three offer online portals and English-language support, but opening the account still requires in-person identity verification or power of attorney.

For ongoing operations, you’ll also need access to:

Business online banking for salary payments, supplier transfers, and tax payments
Statement downloads in the format required by the Georgia tax authority
Secure access for your accountant or service provider

Legal & Regulatory Considerations

Running a business in Georgia has fewer barriers than in most countries. However, there are still legal structures you need to understand, especially if your business is foreign-owned or IP-heavy.

Tax residency and personal risk

You're considered a tax resident if you spend more than 183 days in Georgia during a calendar year. That means you may be liable for tax on worldwide income, not just what your business earns locally.

This often surprises founders who split time between countries. If you have questions, get clarity before tax season. Georgia tax residency impacts your filing obligations, and in some cases, how your company is treated.

Double taxation and treaties

Georgia has double tax treaties with over 50 countries. If you're paying taxes abroad, these treaties may allow you to avoid paying tax again in Georgia. But eligibility depends on correct filing, timing, and documentation. This is especially relevant for tech firms, remote workers, and holding companies.

Intellectual property and trade secrets

If your business relies on proprietary software, formulas, or methods, you should also know about the Georgia Uniform Trade Secrets Act. It provides a legal framework to protect commercially valuable confidential information, but only if you structure and document it properly. Most businesses ignore this until it’s too late.

Final Tips for 2025

Let’s close with what matters for the year ahead.

Tax laws in Georgia stay relatively stable, but 2025 brings some changes you need to be ready for.

What’s new

Audit requirements have been expanded: medium-sized companies (with revenue over 3 million GEL) now require annual audits.
Stricter enforcement on disguised distributions: expenses that benefit shareholders personally are more likely to be taxed.
The Georgia corporate income tax model hasn’t changed, but the Revenue Service is reviewing more cases manually, especially those involving dividend payments and service contracts between related entities.

What to do now

Make sure your bookkeeping is fully aligned with your filings.
File monthly declarations, even if there’s no activity.
Review all salary, dividend, and expense payments for potential tax implications.
Ensure you're registered for VAT or payroll if thresholds have been crossed.
Get ahead of Georgia tax return prep well before the April deadline

This isn’t a market where you want to fix things after the fact. The cost of getting it wrong is always higher than doing it right the first time.

How Bookkeeping Services Can Help

Running a business in Georgia comes with real opportunities and obligations. The Revenue Service doesn’t chase you. It expects you to know the rules, file on time, and keep proper records.

That’s exactly why our clients come to us.

At Gegidze, we provide bookkeeping services in Georgia for companies that don’t want to risk tax penalties, missed filings, or non-compliance with the Georgia tax authority. Our job is to keep your accounts clean, your filings on time, and your books ready for anything, whether a routine audit or a financing round.

If you're managing everything yourself, you’re probably facing at least one of these:

You’re unsure how to complete a Georgia tax return, or whether you’re using the right form
You’ve missed a monthly declaration or submitted it late.
Your books aren’t consistent with what’s reported to the Revenue Service.
You’re not tracking profit distributions, even though they’re taxable.
You’re paying employees, but don’t have withholding tax registration set up properly
You’re not sure which expenses are deductible or what triggers an audit.

Georgia’s tax system is simple, but it’s not flexible. If your company doesn’t follow VAT, payroll, or corporate profit rules, you’ll face automatic penalties, denied refunds, and problems with the Georgia tax center.

We prevent that.

With Gegidze, your accounting is handled by a team that knows the Georgian tax code and how foreign-owned and local businesses operate. We don’t just file forms—we look at your structure, transactions, and goals and make sure your business is set up to grow without compliance gaps.

We take care of:

Bookkeeping that matches international and Georgian standards
Monthly and annual tax filings (income, profit, property)
Payroll and employer declarations
Revenue Service communication - we act as your official tax agent.
Banking and documentation, if needed

If you want to build something serious here, the numbers have to be right for tax season and every month you operate.

Let us keep your accounts clean so you can focus on what grows your business. Get expert help now so your 2025 filings don’t become a problem in 2026.

Book your free consultation today.

Frequently asked questions (FAQ)

What happens if I don’t file monthly tax declarations, even with no activity?

You’re still required to file “zero” declarations. Missing them triggers automatic fines, even if your business didn’t operate that month.

Introduction