What taxes do foreigners pay in Georgia

Introduction

Georgia is often praised for a simple and investor‑friendly tax system, but foreigners still need to know which taxes may apply when buying, owning, or renting property. This guide covers common tax types, practical examples and steps to help you plan confidently.

Key points at a glance ✅

• Whether you pay tax in Georgia depends on residency status and where the income is sourced.
• Rental income, employment income earned in Georgia and income from the sale of Georgian property are commonly taxable.
• VAT applies to many goods and services; business registration and turnover influence whether you pay VAT.
• Municipalities may charge local property and land taxes — these vary by place.
• Simple taxation regimes are available for small businesses and individual landlords.
• The ownership structure (personal vs company) affects tax obligations and reporting.

Residency and taxable income: what matters

Important terms are "tax residency" and "source of income." For foreigners, the crucial practical rule is that taxes generally apply to income generated in Georgia. Your personal tax obligations will depend on how local law treats your residency and the origin of each income stream.

Tip: confirm your tax residency status with a local advisor — it can change reporting and payment responsibilities.

Main taxes foreigners may encounter

1) Personal income tax and rental income 🧾

• Rental income from Georgian property is normally treated as Georgian‑source income and is subject to taxation.
• If you use a property manager, they can often help with withholding and reporting.

Example: buying an apartment to rent long‑term means you should document all rental contracts and expenses to prepare accurate tax returns.

2) VAT (Value Added Tax) 💳

• VAT applies to most commercial transactions. Whether you must register for VAT depends on your business activities and turnover thresholds.
• Private individuals renting one or a few properties may not always fall under VAT rules — but this depends on activity level and legal status.

Tip: short‑term rental (tourist) operations may require different treatment — check with an accountant.

3) Property and land taxes 🏠

• Local authorities levy property and land taxes; amounts depend on location and type of property.

Practical step: ask the seller or local municipality for details on current municipal charges before you buy.

4) Corporate taxes, dividends and business structuring 🏢

• Owning property through a company changes the tax profile: corporate taxes, dividend taxation and reporting obligations may apply.
• Georgia offers simplified tax regimes for small businesses that can be advantageous for landlords and property operators.

5) Social contributions and payroll

• If you work in Georgia, payroll is subject to contributions. If you only derive rental income, payroll contributions usually do not apply unless you employ staff.

Practical checklist before you buy or rent out property

1. Run a tax check before purchase: identify local fees and past liabilities linked to the asset.
2. Decide ownership structure: personal ownership vs company — get a comparative estimate from a tax advisor.
3. Keep clear rental contracts and all invoices for repairs and services — they may reduce your taxable base.
4. For short‑term rentals, verify municipality rules and any specific tourism registrations.
5. Hire a local accountant or legal advisor to handle filings and communications with authorities.

Common mistakes to avoid

• Assuming citizenship protects you from tax obligations in Georgia — obligations depend on the source of income.
• Failing to keep receipts and contract copies — this often increases reported taxable income.
• Not consulting before changing ownership structures or starting commercial rental activity.

Conclusion and next steps 📩

Understanding tax implications is essential for safe and profitable property investment in Georgia. We support buyers and investors by reviewing tax consequences, suggesting optimal ownership structures and helping with local compliance.

If you're planning to buy or rent out property in Georgia, contact us for help with tax checks, property selection and paperwork. Visit https://buyhome.ge/en to start or search properties at https://buyhome.ge/en/search — we'll help you move forward.