The Individual's Declaration Obligation
Individual tax preparation in Georgia rests on the rules of Article 153 of the Tax Code: a declaration on income tax is submitted to the tax organ by resident physical persons whose income is not taxed at the source of payment in Georgia, and by non-resident physical persons whose income from a Georgian source is not taxed at the source, by 1 April of the year following the reporting year. A person who has no obligation to declare may still submit a declaration with a request for the recalculation and refund of the tax.
Special deadlines are equally clear: an entrepreneur physical person who ceases economic activity submits within 30 working days a declaration on aggregate income and deductions, and a person in dissolution does so within 5 working days of the registration of the start of liquidation. 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 tax is payable over 2 calendar years.
Withholding at Source and the Tax Agent
In the case of salary the tax is usually withheld at the source by the tax agent — a legal person, enterprise, organization or entrepreneur physical person paying the salary. Under Article 154 the agent's obligations also fall on payers of pensions, scholarships, dividends, interest and royalties, and on cases of reimbursing the value of services rendered to a physical person. The withheld tax is transferred to the budget simultaneously with the payment of the sum, and where a disbursement takes a non-monetary form — by the last day of the corresponding month.
The certificate institution matters for the individual: on payment of salary the recipient may request a certificate indicating the surname, name, amount and type of income and the tax withheld; the tax organ receives a certificate on total sums no later than the 15th day of the month following the month of withholding. Where the tax was not withheld, responsibility lies with the payer of the income, though the recipient may also pay the tax and sanctions.
Income Exempt from Taxation
Article 82 defines the types of physical persons' income freed from income tax: received grants, state pensions, state compensation, state academic and state scholarships; alimony; the value of property received on divorce; and prizes received by athletes, coaches and medical staff for victory at the Olympic Games, chess Olympiads, world or European championships and European Games.
Property-related benefits are also significant: exempt are the excess from the sale of a dwelling house or flat owned for more than 2 years; the excess from the sale of a vehicle owned for more than 6 months from the registration of title; and the excess from the supply of an asset owned for more than 2 years. Property received by gift or inheritance by heirs of the I and II degree is not taxed, and the value of property received by gift up to 1000 lari per year is likewise exempt, except when received by an employee from the employer. In a voluntary private pension scheme, pension contributions made up to 6 000 lari per year are also exempt.
The Monthly Cycle in Individual Cases
Where individual objects of taxation defined by law apply, physical persons submit a declaration monthly, no later than the 15th day of the month following the reporting month; the same deadline operates where a physical person receives excess income from the supply of property or an asset outside entrepreneurial activity. Pension rules are refined: contributions to the funded pension scheme and the benefit accrued on them are exempt, while amounts returned for erroneously or excessively made contributions are excluded from the exemption and are taxed at the general rate.
In preparing the declaration the individual aggregates income by source: one part is withheld at the source and reflected in the certificate, the other becomes the subject of the declaration. Correctly separating these two rings determines whether the person pays an additional sum or receives a refund; a mismatch breeds artificial liability.
Frequently Asked Questions About Individual Taxes
When must an individual submit a declaration?
By 1 April of the following year where the income is not taxed at the source; on cessation of activity — within 30 working days.
Which income is not taxed?
Grants, state pensions and scholarships, alimony, property received on divorce, the excess from the sale of long-held property, and inheritance from heirs of the I and II degree.
What is the tax agent's certificate?
A document issued on request when salary is paid, reflecting the amount of income and the tax withheld.
How much pension contribution is exempt?
Contributions made in a voluntary private pension scheme up to 6 000 lari per year.
How We Help on Legal.ge
We prepare individuals' tax declarations in full: we aggregate income from all sources, record benefits and deductions, check the amounts withheld at the source against certificates, and use the recalculation and refund mechanism. We arrange the annual and monthly schedule and assess property-related benefits. Contact us today — a properly prepared declaration saves money and removes risk, while a late correction always creates additional costs.