Property-Tax Planning: Lawful Instruments
Planning the property tax means that the payer makes medium-term decisions so that the tax burden decreases within the bounds of the law. For this one must first know who is taxed on what: the payer of the property tax is a resident enterprise and organization — on assets recorded on the balance, uninstalled equipment and unfinished construction, as well as property leased out; a non-resident enterprise — on the same property located in Georgia; a natural person — on immovable property held in ownership, yachts, helicopters, aircraft, and light vehicles determined by code 8703 of the national commodity nomenclature of foreign-economic activity.
The first checkpoint of planning is precisely this circle: the status of the person holding the property and the method of recording the property determine the base on which the object is taxed. Property registered in the name of a deceased person but held or used by another is likewise taxed — except use on the basis of lease, tenancy or usufruct. These details must be taken into account in planning decisions in advance.
Rates and Value Rules
For an enterprise the annual rate is determined at no more than 1 percent of the taxable value, and for leased-out property the same rule is built on the average annual residual book value. For a leasing company, the annual tax on property leased out is determined for the whole leasing period at no more than 0.6 percent of the initial book value at the moment of first leasing — this distinct regime is one of the mainstays of planning leasing structures.
The value-increase rules are also relevant: for assets received before 2000 the value increases threefold, for those received in 2000-2004 — twofold, and for 2004 — one and a half times; exempt from this increase is the enterprise that records immovable property using the revaluation method and has audited statements — the statements being usable for 4 years. An active balance policy, the timeliness of audits and the documentation of asset receipt thus directly influence the tax.
Land Planning: Category and Territory
The mainstay of land planning is the differentiation of categories and territories: for agricultural and forest lands the base rates are established per hectare in lari and vary by territory — for arable land from 100 to 56 lari, for hayfields and pastures from 20 to 5 lari. A municipality may raise the rate up to 150 percent of the established base. For non-agricultural land the base is 0.24 lari per square meter with a territorial coefficient not exceeding 1.5; land for the use of natural resources is taxed at up to 3 lari per hectare. Taking these parameters into account before acquiring land is part of planning.