Tax Evasion Defense in Georgia | Legal.ge

TaxEvasionDefense

What is the threshold for criminal tax evasion in Georgia?

Criminal liability begins when the evaded tax amount exceeds 100,000 GEL. Below this amount, it is an administrative offense.

Can I resolve the case by paying the tax?

Yes, paying the principal tax plus penalties is the most effective way to reach a plea agreement and avoid prison.

Is the accountant or director liable?

Usually, the director is liable, but if the accountant actively participated in fraud or forgery, they can also be charged as an accomplice.

Will my assets be frozen during the investigation?

It is very likely. The court may seize company and personal assets to ensure the payment of potential damages and fines.

Tax evasion (Article 218 of the Criminal Code) is one of the most common and complex economic crimes in Georgia. In order to protect the state's fiscal interests, investigative bodies — especially the Investigation Service of the Ministry of Finance of Georgia — actively investigate cases of intentional non-fulfillment of tax obligations by business entities. Criminal liability arises when the amount of unpaid tax exceeds the statutory "large amount" (currently 100,000 GEL). This crime threatens not only the financial stability of the company but also the freedom of its executives. Directors, accountants, and de facto managers can become targets of criminal prosecution. Effective defense requires specific knowledge combining criminal procedural norms with a deep analysis of tax legislation. The involvement of a qualified lawyer is crucial to distinguish a tax error from an intentional crime and to avoid the most severe consequences.

What does Tax Evasion Defense service cover?

Lawyers registered on the Legal.ge platform offer comprehensive legal services:

Analysis of tax audit and inspection materials: Legal and financial assessment of acts drawn up by the Revenue Service, identifying errors, and developing an appeal strategy.
Representation in investigative bodies: Protecting client rights during interrogation, search, seizure of documents, and other procedural actions at the Investigation Service of the Ministry of Finance.
Alternative tax expertise: Engaging independent auditors to determine the actual amount of tax liability, which often reduces the accrued amount below the criminal threshold.
Negotiating a plea agreement: Negotiating with the state on a schedule for compensation of damages and the use of a suspended sentence or fine instead of actual imprisonment.
Protection against asset seizure: Using legal mechanisms to protect business assets and personal property from groundless seizure.

Common Situations and Scenarios

Charges of tax evasion are often related to the following circumstances:

Avoiding income declaration: Hiding real turnover and maintaining a "black cash register" where funds are not reflected in bank accounts.
Artificial inflation of expenses: Recording fictitious operations with non-existent or so-called "one-day" companies to reduce profit tax.
Illegal use of VAT credits: Using fake tax invoices to reduce VAT liability.
Paying salaries in cash: Paying salaries unofficially to employees to avoid paying income tax.
Shortage of inventory: A large shortage revealed as a result of inventory, which is considered as sales without documents.

Georgian Legislation and Legal Framework

The main regulatory act is Article 218 of the Criminal Code of Georgia, which provides for liability for tax evasion in a large amount. A "large amount" is considered an amount exceeding 100,000 GEL. If the amount is less, the case is classified as a tax offense and is regulated by the Tax Code of Georgia. The Law on Entrepreneurs is also important, as it defines the liability of directors. In investigative practice, forensic accounting expertise is of decisive importance. The legislation provides for a concession: if a person fully reimburses the debt and penalties, criminal prosecution can be terminated or diverted (in the case of a first offense).

Service Delivery Process

The process begins with a risk assessment. The lawyer familiarizes themselves with the company's accounting and the tax audit act. If the investigation has begun, the lawyer participates in interrogations and requests case materials. It is often necessary to conduct an alternative audit to reduce the disputed amount. The defense strategy can be twofold: complete denial of guilt (if there is no intent or the amount is calculated incorrectly) or cooperation with the investigation in exchange for compensation for damages and a plea agreement.

Why choose a specialist on Legal.ge?

Working on tax crimes requires a lawyer who is equally proficient in criminal law and financial accounting. Specialists represented on Legal.ge often work together with auditors and former tax inspectors, ensuring comprehensive defense. Incorrect defense can lead not only to business bankruptcy but also to real imprisonment. Trust professionals who will protect your interests on Legal.ge.