Procedure for calculating the term when determining tax residence in Georgia
Tax residence in normal procedure
In accordance with Part 2 of Art. 34 of the Tax Code of Georgia (hereinafter referred to as the Tax Code of Georgia), a tax resident is a person who has stayed in the territory of Georgia for more than 183 days during any 12 subsequent months before submitting an application to acquire tax resident status.
Important: The term for recognition as a tax resident is any 12 months.
This means that 183 days are counted not for the calendar year (from January 1 to December 31), but for the 12 continuous calendar months preceding the time of application to establish the fact of tax residence (for example, from August 12, 2023 to August 11, 2024).
| Example: If a person submits an application for recognition as a tax resident of Georgia on August 12, 2024, then the period 08/12/2023-08/12/2024 will be taken into account. |
Tax residency by wealth
In addition to the possibility of becoming a tax resident of Georgia based on the number of days of residence, there is a procedure for recognizing an individual as a tax resident of Georgia “based on wealth.” If you do not have a Georgian residence permit, you can be recognized as a tax resident of Georgia if you show income from a source in Georgia in the amount of GEL 25,000 for the last tax year.
Moreover, the procedure for calculating the term with this approach will be different.
In accordance with the Order of the Minister of Finance of Georgia No. 60 dated March 1, 2023, the rules and procedure for obtaining a certificate of tax resident of Georgia based on wealth are approved.
When calculating the term for obtaining tax resident status, there is a statement “during the last tax year, before filing an application for recognition as a tax resident,” which leaves a gap in the legislation without a specific indication of the basis for calculating the term (calendar year or any 12 months).
Important: in practice, the Georgian Revenue Service, when calculating the term for recognizing a person as a tax resident of Georgia, interprets the term “last tax year” as a calendar year.
| Example: If you want to become a tax resident of Georgia based on wealth for 2024 in the absence of a Georgian residence permit, then documents confirming the availability of property and income received for 2024 must be submitted in 2025. Or it will be necessary to show income of GEL 25,000 from a source in Georgia in 2023 to obtain a Georgian tax resident certificate for 2023 in 2024. |
REVERA case
The client owns a bank account in Georgia with funds accounting more than USD 500,000 and has received income from a source in Georgia in the amount of GEL 25,000. After submitting documents for obtaining a Georgian tax resident certificate based on wealth for 2023, the tax service determined the calculation term - the entire calendar year 2023, but a tax resident certificate can only be obtained in 2024 based on Order No. 60 of March 01, 2023.
Such legislative features are typical not only for Georgia, but also for other countries. Therefore, when planning to obtain the status of a tax resident of a particular country, we recommend that you refer to the norms of national legislation.
Authors: Levan Pogosov, Yaroslavna Zadesenskaya
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