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Tax-Exempt Status

Are all NGOs in Georgia tax-exempt?

No, generally only grant income and donations are exempt from profit tax. Income generated from economic activities (selling goods/services) and employee salaries are subject to standard taxation unless specific exemptions apply.

How can I get "Charitable Organization" status?

You must apply to the Revenue Service after at least one year of operation. You need to prove that your activities are charitable and meet specific criteria outlined in the Tax Code.

Is VAT exemption automatic for grant projects?

No, VAT exemption on goods/services purchased with grant funds requires a specific procedure. The grant agreement must be registered, and specific lists of goods need approval from the relevant ministry.

Do foreign donors get tax benefits?

Foreign donors generally do not get direct tax benefits in Georgia unless there is a specific bilateral treaty. However, the recipient NGO's tax-exempt status ensures the full donation amount goes to the cause.

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Tax incentives for NGOs and obtaining "Charitable Organization" status in Georgia is a complex and strictly regulated process. It is important to distinguish between a standard NNLE (which automatically enjoys certain exemptions, e.g., profit tax exemption on grants) and the official "Charitable Organization" status granted by the Revenue Service. The latter confers additional privileges but imposes strict obligations, including annual audits and detailed reporting of activities. Many organizations mistakenly believe that registering as an NNLE automatically means exemption from all taxes. In reality, economic activities, payroll taxes, and certain types of imports are subject to taxation if not properly structured.

Our service includes full legal support for optimizing tax benefits and obtaining status. Specialists offer:

  • Analysis of the NNLE's current tax position and risk assessment;
  • Preparation and submission of documentation to the Revenue Service to obtain "Charitable Organization" status;
  • Consultation on separating grants, donations, and economic activities;
  • Managing procedures for VAT exemption (including on imports purchased with grants);
  • Legal preparation of annual reports necessary to maintain the status;
  • Representation at the tax authority in case of disputes.
This service helps you maximize statutory benefits and avoid fines.

Proper management of tax status is essential in specific situations. For example, an organization plans to open a social cafe. This is an economic activity, and profits are taxable unless the activity is properly structured. Another example is a donor who wants to reduce their tax liability through a donation — for this, the recipient organization must have official charitable status so the donor can use the receipt for deductions. Also, when importing expensive equipment under a grant, VAT exemption is not automatic and requires prior procedures with the Ministry of Finance.

The legal framework relies on the "Tax Code of Georgia" (Article 32 - Charitable Organization, Article 99 - Profit Tax Exemption). The Code establishes that charitable status is granted to an organization that has been engaged in charitable activities for at least one year. Revocation of status occurs in cases of strict violations, leading to the repayment of all received benefits with penalties. Therefore, constant legal oversight is critical.

The process begins with an audit of the organization's financial history. The lawyer checks if the organization meets the criteria for the status. Then, an application and activity program are prepared. After obtaining the status, the lawyer assists the organization in maintaining the registry. With the help of a specialist on Legal.ge, you will be able to alleviate the tax burden through legal means.

Legal.ge is a platform connecting the non-profit sector with qualified tax lawyers. Do not risk your reputation and finances. Organize your tax status with the help of professionals.

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