The Foundations of Annual Business Declaration
Business tax preparation in Georgia rests on the declaration obligations established by Article 153 of the Tax Code: a declaration on income or profit tax is submitted to the tax organ by 1 April of the year following the reporting year. This obligation is fulfilled by resident physical persons whose income is not taxed at the source of payment in Georgia, by enterprises, and by non-resident physical persons and non-resident enterprises without a permanent establishment where their income from a Georgian source is not taxed at the source.
Special situations are also foreseen: an entrepreneur physical person who ceases economic activity in Georgia submits within 30 working days a declaration on aggregate income and deductions, while a person in dissolution notifies the tax organ in writing within 5 working days of the registration of the start of liquidation and submits a declaration within the same period. Where a bankruptcy regime is opened, the declarations not submitted for periods preceding the opening of the regime must be presented within 15 days of the court ruling entering into legal force.
A separate rule concerns inheritance and gifts: where heirs of the III and IV degree receive by gift or inheritance property valued at 150 000 lari or more within a tax year, the income tax becomes payable over 2 calendar years, and the registering organ informs the person of the obligation to report and pay tax. A person not obliged to submit a declaration may nonetheless file one with a request for recalculation and refund of the tax — an instrument that works as a route to recovering overpaid tax.
Monthly Declarations and Current Payments
The monthly schedule is equally clear: an entrepreneur physical person, an enterprise and an organization submit to the tax organ, no later than the 15th day of the month following the reporting month, a declaration on the sums of remuneration paid and the tax withheld; the declaration connected with the taxation of disbursements follows the same calendar.
Article 155 regulates current payments: an enterprise and an entrepreneur physical person whose reporting period is the calendar year pay into the budget, according to the previous year's annual tax, in four instalments — no later than 15 May, 15 July, 15 September and 15 December, each in the amount of 25 percent. Current payments are not made by a taxpayer who had no taxable income or profit in the past tax year, nor by a person whose micro business or fixed taxpayer status was cancelled in the current year and who had taxable income according to the past year.
A change in expected income is also accounted for: where the expected taxable income of the current year decreases by at least 50 percent compared with the past year and the person notifies the tax organ before the payment deadline, the person may reduce or not pay the current payments. If the actual annual results do not confirm the decrease, the surcharge must be paid within the period from the established payment dates until the submission of the declaration.
Extension of the Deadline and Correction of Declarations
Article 68 offers an important option: the deadline for submitting the annual income, profit or property tax declaration is extended by 3 months where the person has paid the current payments, or has no such obligation, and applies in writing to the tax organ before the expiry of the deadline. The payment deadline is not changed by the extension — a detail often overlooked and a source of surcharges.
Article 69 governs corrections: where an error is discovered in a submitted declaration, the person must enter a change or addition; a corrected declaration is deemed originally submitted if it is presented before the expiry of the deadline. Periods are also singled out where the submission of a declaration during an ongoing tax inspection is restricted — taking this restriction into account is of tactical importance.
Frequently Asked Questions About Business Tax Preparation
When does a business submit the annual declaration?
By 1 April of the year following the reporting year; on cessation of activity — within 30 working days, and from the registration of the start of liquidation — with notification and a declaration within 5 working days.
How are current payments distributed?
According to the previous year's annual tax, in four equal parts — 25 percent by 15 May, 15 July, 15 September and 15 December.
Can the deadline be extended?
Yes — by 3 months, where current payments are paid or no such obligation exists and the application is made before the deadline; the payment deadline does not change.
What happens with a corrected declaration?
It is deemed originally submitted if presented before the expiry of the original deadline; submission during an inspection is restricted.
How We Help on Legal.ge
We prepare business tax reporting for the full cycle: we aggregate income and deductions, draft annual and monthly declarations, plan current payments, manage corrections and use the instruments of extension and refund. Contact us — tax preparation on a precise schedule removes the risk.