Introduction: Accurate Calculation of Corporate Taxes
Business Tax Preparation is a critical process for any legal entity in Georgia, whether it's an LLC, Joint Stock Company, or General Partnership. This service involves not just the mechanical filling of declarations, but the preliminary calculation, optimization, and documentary substantiation of tax liabilities. The "Estonian Model" of profit tax currently in force in Georgia offers many advantages to businesses, but it contains specific nuances, the neglect of which can lead to unforeseen tax burdens. Assistance from a qualified specialist ensures that the company pays exactly what the law requires—no more, no less.
What Does Business Tax Preparation Cover?
The service covers the complete management of the corporate tax portfolio. Key components are:
- Profit Tax Calculation: Determining the tax base for dividend distribution, non-economic expenses, and representative expenses (15%).
- VAT Administration: Balancing input and output VAT, calculating the proportional credit coefficient for mixed operations.
- Withholding Taxes: Calculating tax when paying salaries, interest, royalties, and dividends.
- Import Tax Planning: Preliminary calculation of customs duty, import VAT, and excise tax before cargo importation.
- Utilization of Tax Incentives: Reflecting benefits relevant to "Free Industrial Zone," "Virtual Zone," or other special statuses.
- Documentation Preparation: Auditing invoices, acts, and contracts required for tax purposes.
Common Situations and Scenarios
One of the most complex issues is "non-economic expenses." For example, a company bought an expensive car or paid for a restaurant meal not related to its core business. The specialist analyzes these expenses and determines whether they should be taxed with profit tax. A second scenario is "bad debts": the company has accounts receivable that it cannot collect. The accountant prepares documentation to write off this debt so that the tax authority recognizes it as an expense. A third case is the sale of fixed assets: the specialist calculates the VAT liability and profit tax based on the asset's residual value.
Georgian Legal Framework
Business tax preparation relies on the Tax Code of Georgia. Crucial are Article 97 (object of profit taxation) and Articles 98-102 (expenses and distributed profit). In the VAT section, Book VI is important, defining the object, time, and place of taxation. Also, businesses must consider Order No. 996 of the Minister of Finance on tax administration, which details record-keeping rules. For international operations, relevant Double Taxation Avoidance Treaties are applied.
Process: How Are Taxes Prepared?
The process begins at the end of the reporting period (month) with the collection of all primary documents. The specialist processes the data in accounting software. Then a "control calculation" takes place—before the declaration is sent, the specialist compares data with previous periods and checks logical connections (e.g., VAT turnover vs. revenue). If a suspicious transaction is found, it is discussed with management. Finally, a Payment Order with the exact amount is prepared for the company to transfer to the budget.
Why Choose a Specialist on Legal.ge?
Business taxes are not an area where experiments are permissible. On Legal.ge, you will find corporate tax specialists who understand the specifics of various industries (construction, trade, IT, logistics). Our experts ensure accurate and timely fulfillment of your tax obligations, allowing you to concentrate on business development rather than tax problems.
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