The Essence of the Current Payments System
The Tax Code of Georgia obliges enterprises and entrepreneur individuals to pay part of the annual tax during the year, in the form of current payments, into the budget in a timely manner. The system spreads the tax — according to the annual tax of the previous reporting period — into four equal parts and allows a planned schedule instead of a single large payment at the end of the year. This page explains which deadlines and amounts are provided, who is exempt from these payments and what happens when income decreases.
The Deadlines and Amounts of the Four Payments
An enterprise and an entrepreneur individual whose reporting period is the calendar year pay current payments according to the annual tax of the previous reporting period on the following schedule: no later than 15 May — 25 percent; no later than 15 July — 25 percent; no later than 15 September — 25 percent; no later than 15 December — 25 percent. The amounts paid into the budget are credited to the taxpayer against the tax charged for the tax year, so these payments are not an additional tax but an advance distribution of the annual amount. If the tax rate changes compared with the previous tax period, the taxpayer may pay current payments recalculated from the previous year's taxable income at the rate in force for the current year.
Who Does Not Pay Current Payments
The law provides exceptions: current payments are not paid by a taxpayer who had no taxable income or taxable profit during the past tax year, and by a person whose micro business or fixed taxpayer status was cancelled this year and who had taxable income for the past year. A separate rule concerns small and micro business: a physical person with micro business status and a physical person with small business status do not pay current payments; salary of up to a total of 6 000 GEL paid within a calendar year by a small business status holder to employees is not taxed at the source of payment, if the person registered as an individual entrepreneur and received the status in the same calendar year, or if the total income of the previous calendar year does not exceed 50 000 GEL.
The Case of a Decrease in Income
If the expected taxable income or profit of the current tax year, taking tax allowances into account, decreases by not less than 50 percent compared with the past year, and the taxpayer notifies the tax authority about it before the payment deadline, the taxpayer is entitled to reduce the current payments or not to pay them at all. If, however, the actual annual results submitted do not confirm such a decrease and the taxpayer has not paid the current payments in full, the remaining amount must be paid with interest, from the established payment dates until the filing of the declaration. Where the payment obligation is not fulfilled, the law provides enforcement measures for the recovery of tax debt.
The General Rule on Payment Deadlines
The deadline for paying a tax and current payments is established for each tax separately. Where the Code does not determine a payment deadline, the tax is paid within the deadline for filing the declaration, and in other cases — within 30 days of receiving the tax demand. A similar logic applies to the property tax for enterprises: the enterprise files the property tax declaration no later than 1 April and pays the tax within the same deadline, and pays the current payment no later than 15 June; the tax on land is paid no later than 15 November.
Frequently Asked Questions
Below are answers to the questions raised most often about current payments.
How much is one current payment?
25 percent of the annual tax of the previous reporting period; the four payments together equal the annual tax and spread it over the year.
What are the payment deadlines?
No later than 15 May, 15 July, 15 September and 15 December; in the property tax the current payment is made no later than 15 June, and the tax on land — by 15 November.
May I skip a payment?
Yes, if the expected income decreases by not less than 50 percent and you notify the authority before the deadline; if the decrease is not confirmed, the remaining amount is paid with interest.
Who is exempt from current payments?
A person with no taxable income or profit in the past year; physical persons with micro or small business status; and, under certain conditions, persons whose status was cancelled in the current year.
How We Help on Legal.ge
The tax specialists of Legal.ge will help you plan the schedule of current payments: we compute the amount of each payment, assess the possibility of reduction or non-payment and plan the notifications to the tax authority. Contact us — a correct schedule protects both your budget and your compliance.