Taxation of Remote Work in Georgia: Determining the Source of Employment Income

09.12.2025

• 1. Tax residency
• 2. What is employment (Article 12 of the Labor Code)
• 3. How is the source of income determined (Article 104 of the Tax Code)
• 4. Scenario I – A Georgian company employs a foreigner who works abroad
• 5. Scenario II – A Georgian resident works for a foreign company from Georgia
• 6. Conclusion
• Where is the labor obligation actually fulfilled?
• Contact our lawyer for more details

If you are a company registered in Georgia that signs employment contracts with employees abroad, or a foreign company that employs Georgian residents who work from Georgia, it is important to know how the Georgian Tax Code defines the source of income from employment.

According to the definitions of the Revenue Service, in remote work conditions, the actual place of work is of crucial importance.

1. Tax residency

The first step in determining tax liability is to assess the person's residency (Article 34 of the Tax Code):

• Resident — a person who is present in Georgia for 183 days or more in a 12-month period.
• Non-resident — a person who does not meet this criterion.

Residents are taxed under Georgian legislation on both income received from sources in Georgia and income received from foreign sources, while non-residents are taxed only on income received from sources in Georgia (Articles 79 and 100 of the Tax Code).

2. What is employment (Article 12 of the Labor Code)

Employment is considered to be the performance of obligations by an individual within the framework of relationships regulated by the labor legislation of Georgia and/or a foreign country. That is:

• Employee — a natural person working for hire,
• Employer — the person receiving the job,
• Remuneration — salary.

3. How is the source of income determined (Article 104 of the Tax Code)

The main rule:

Income earned from employment in Georgia will be considered to be earned from a source in Georgia — regardless of where the salary is paid (Tax Code 104.2).

According to the position of the Revenue Service, one of the important determining criteria for tax purposes is where a person actually performs their work.

If the work is performed in Georgia - the income is considered to be received from a source located in Georgia. If abroad — from a foreign (outside Georgia) source.

4. Scenario I – A Georgian company employs a foreigner who works abroad

If:

• The employee is not a resident of Georgia,
• The work is performed entirely outside of Georgia,
• Remuneration is transferred to a foreign account,

In this case, the income will not be considered to have been received from a source in Georgia as defined in Article 104 of the Tax Code.

Result:

• The obligation to withhold and pay income tax does not arise in Georgia.
• The employer does not perform the function of a tax agent (CPC 154.1(a)).
• DTA (Double Taxation Agreement) calculation is not required, as no tax liability arises in Georgia.

The employer has only one obligation: to record the employee's data in the register of employed persons (Article 12(3), Order of the Minister of Finance No. 996).

5. Scenario II – A Georgian resident works for a foreign company from Georgia

If resident:

• is physically present in Georgia, and
• performs work remotely for a foreign employer

According to the Revenue Service, such remuneration is qualified as income received in Georgia, since the work is performed on the territory of Georgia (Tax Code 104.1(a)).

Result:

• Income is taxed in Georgia.
• The 82.1(f) exemption does not apply because the income is not foreign source.
• An individual is obligated to pay taxes independently.

Based on the DTA, it is possible to avoid double taxation by submitting the relevant document to the other state.

6. Conclusion

An important condition when determining the source of income in remote working conditions is

Where is the labor obligation actually fulfilled?

If the work is done abroad:

• Income will not be considered to be derived from a source in Georgia.
• The Georgian company will not be required to withhold or pay income tax.

If the work is being done from Georgia:

• Income is considered to be received from a source in Georgia.
• A resident of Georgia (employee) pays income tax himself/herself

If your company collaborates remotely and you need:

• Correct identification of the source of income,
• Evaluation of the structure of employment contracts,
• Tax risk analysis.

We are ready to help you.

Contact REVERA Georgia — we will evaluate your case and provide you with specific, practical recommendations.

Authors: Melano Svanidze, Oksana Iashagyan

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