The purpose of Article 165²
Article 165² of the Code of Administrative Offences of Georgia establishes administrative liability for evading the subsoil use tax. The norm is an administrative-law instrument protecting the fiscal interest of the state in the sphere of the rational and tax-burdened use of subsoil resources.
Subsoil use is an activity carried out under a special permit, and its coverage by the tax is a significant source of the state budget. Evading the tax means that the use actually takes place but the tax is not paid or is not paid in full — the legislature responds to this with an administrative sanction.
The amount of the fine
The administrative offence provided for by Article 165² entails a fine in the amount of 800 to 1 000 lari. Unlike precisely fixed sums, the legislature here establishes a range: the concrete amount is determined within this range. This is the only sanction established by this norm.
The existence of a range means that the circumstances of the case affect the final amount within these limits; going beyond 1 000 lari is not provided for by this article.
What the article does not regulate
Article 165² defines only the elements of the offence and the sanction. The procedure for calculating the subsoil use tax, the circle of payers and the payment procedure are governed by tax legislation, while the questions of administrative proceedings — who draws up the protocol and how a decision may be appealed — are governed by other provisions of the Code. An assessment of a concrete case therefore requires a joint analysis of the tax and administrative regulations.
It is also important that the forms of evasion are not listed in detail in the text of the article: the norm responds in general terms to the evasion of the tax, and the concrete factual circumstances are established through the materials of the proceedings.
The subject of liability and debt management
Article 165² does not define a separate subject — the sanction is linked in general terms to the fact of evasion of the tax, and the circle of subjects of proceedings is governed by the general provisions of the Code. As for the practical side, debt management consists of three steps: re-verifying the calculation of the tax, analysing the payment history and documentation, and obtaining a legal assessment of whether the facts indeed constitute an administrative offence. Such an approach prevents the problem from growing into a fine or beyond its limits.
Protecting the fiscal interest
The subsoil use tax is not only budgetary revenue but also an instrument of resource management: its payment reflects the actual volume of use and contributes to the accounting of subsoil wealth. Evading this tax blurs that picture and damages the basis on which the state plans its resources. The sanction therefore also has a preventive dimension: it is directed towards ensuring that use is transparent and fully covered by the tax.
The context of subsoil use
Subsoil use covers the extraction and use of the wealth contained in the subsoil. In this sphere the state pays particular attention to the transparency of the use and of the income derived from it: the tax is the measure of that transparency. Where extraction actually proceeds but the tax is not reflected, the state loses not only revenue but also the ability to see the real volume of resources. This is precisely why evasion is the object of an administrative sanction.
On the non-payment of the fine
Article 165² itself does not determine the consequences of non-payment of the fine — that question is governed by other provisions of the Code. When a penalty is imposed it is therefore important to familiarise yourself in good time with the rules and deadlines for payment, so that the primary obligation does not grow into additional costs.
How Legal.ge can help
The boundaries between tax and administrative qualification in this sphere are often disputed: it is important to establish precisely whether the facts indeed constitute an administrative offence and how well-founded the concrete amount of the fine is. The Legal.ge team will help you analyse the case materials, verify the qualification and defend your position. We examine each case individually.