Relief from double taxation is one of the central tax issues of international economic activity: taxing the same income in two states places a significant financial burden on business. The Georgian Tax Code answers this problem with several instruments — the procedure for enjoying tax benefits under international double taxation treaties, the credit for tax paid abroad, and the mechanism for recalculating tax withheld at source. The precise application of these rules is exactly what distinguishes lawful tax planning from being taxed twice.
Benefits Under International Treaties
Under Article 125 of the Tax Code, the enjoyment of the tax benefit determined by international double taxation treaties, and the procedure for refunding tax paid in Georgia by a non-resident, are defined by an order of the Minister of Finance of Georgia. This means that the practical use of a treaty benefit — the list of documents, the refund procedure and the deadlines — is established by a single legal act. Where the treaty so provides, a non-resident may recover part or all of the tax withheld in Georgia.