The Legal Regime of Tax Exemptions
Article 60 of the Tax Code sets clear boundaries: exemption from a general state or local tax is possible only through an amendment or addition to the Code, and a local tax exemption through an amendment to the relevant normative act. A tax exemption is an advantage granted to a particular category of taxpayers compared with other taxpayers — paying less tax or being fully relieved of it. Individual exemptions and the relief of a separate person are prohibited, and the taxpayer's right to the exemption runs from the moment the corresponding legal basis arises, for the entire period of its operation. This page explains which incomes and property are exempt under articles 82 and 206 of the Code and how an application is prepared.
Incomes Exempt from Income Tax
Under article 82, the following types of income of natural persons are exempt from income tax: incomes of a non-resident from employment in foreign diplomatic and equalled establishments; received grants, state pensions, state compensation, state academic and state scholarships; benefits received within charitable activity from a non-entrepreneurial legal entity and from a charitable organization for the financing of treatment; contributions to and returns on the funded pension scheme. Property received by inheritance or gift also follows special rules — our separate page covers that topic. The list of exemptions is closed: whatever is not expressly fixed in the Code is not an object of exemption, and crossing that boundary leads to subsequent assessment of the tax.
Property Exempt from Property Tax
Article 206 determines, by taxable object, the property exempt from property tax. The most sought-after exemption concerns a natural person's taxable property other than land: it is exempt where the family's income received during the preceding calendar year does not exceed 40,000 lari. Beyond that, exemption covers roads and power transmission lines; an organization's property and property leased out by it — other than land and property used for economic activity; land connected to heritage monuments and protected areas; property in occupied territories and resettlement objects for displaced persons; newly granted agricultural land for 5 years from receipt; agricultural land whose fertile layer is half or more damaged; and the land of a person permanently residing in a highland settlement. The list further covers research and educational plots, forest organization lands, amelioration infrastructure, windbreak strips, city reservoirs and drinking-water objects — a catalogue showing that the exemption always works by concrete functional designation or status, never as a personal privilege. Each exemption depends on a confirming document — a certificate or a status document.
The exempt list is long and branch-specific, and each of its items must be checked with precision: in practice it is precisely a classification error — an income recorded as exempt though it fits no category — that is the most widespread cause of disputes. The exemption works on condition that the income objectively meets the signs named in the Code, and this the taxpayer must establish through documents.
Preparing and Filing the Application
The use of an exemption works procedurally differently for income and property taxes: for income tax, what matters is the correct classification of the exempt income in the declaration; for property tax, the timely submission of the relevant certificates and status documents to the tax authority. The form and procedure of the application are determined by the regulations of the tax authority, so in each case the applicable documents and deadlines must be verified. Our advice: compile a full list of incomes and property, single out the exempt categories group by group, and attach confirming documentation to each — that is the only way to have the application satisfied on first request. Where the authority questions the classification, the justification rests on the exact wording of the Code and complete documentation — an argument prepared in advance weighs far more than one assembled after a demand arrives.
Frequently Asked Questions
May a separate person be exempted?
No — the Code directly prohibits exemptions of individual character and the relief of a separate person; exemptions operate by category only.
When does an exemption begin to operate?
The right arises from the moment the corresponding legal basis arises and extends over the entire period of its operation.
Which incomes are the best-known exempt types?
State pensions, grants, state compensation and scholarships, benefits from charitable organizations, and contributions to and returns on the funded pension scheme.
Which families are exempt from property tax?
Families whose income in the preceding year does not exceed 40,000 lari — their taxable property other than land bears no tax.
How We Help on Legal.ge
The Legal.ge team assists both natural persons and organizations: we determine whether your income or property falls within the exempt categories, draft the declaration and the application, arrange the confirming documents and guide you through interaction with the tax authority. Contact us — an exemption the law grants you should be used in full. Legal.ge.