LegalGELegalGE
...

Exit Tax Planning

Does Georgia have an Exit Tax for individuals?

No, Georgia does not impose a specific "Exit Tax" on the unrealized capital gains of individuals leaving the country. This makes Georgia a favorable jurisdiction for digital nomads and expats leaving after a period of residency. However, you must settle all outstanding tax liabilities for income earned during your residency period before you leave.

How do I stop being a tax resident of Georgia?

Tax residency is generally determined by the "183-day rule." If you spend fewer than 183 days in Georgia within any continuous 12-month period ending in the tax year, you cease to be a resident. For High Net Worth Individuals (HNWI) with special residency status, you must formally apply to the Revenue Service to revoke this status to stop tax obligations.

Will my Georgian company be taxed abroad if I move?

If you manage your Georgian company remotely from another country (e.g., Germany or the UK), that country's tax authorities might claim that your company has a "Place of Effective Management" (POEM) there, subjecting it to local corporate tax. We help structure your management board to maintain Georgian substance and avoid this risk.

What happens to my real estate taxes when I leave?

Property tax in Georgia applies to assets located in Georgia, regardless of your residency. If you keep your apartment, you must continue filing annual property tax declarations if your family's annual worldwide income exceeds 40,000 GEL. Leaving the country does not exempt you from property tax obligations.

Reading Time

2 min

Published

...

Tax residency termination and associated taxes (Exit Tax planning) is a complex legal process relevant when an individual or company leaves the jurisdiction of Georgia. While Georgia does not have a classic "Exit Tax" in the European sense (tax on leaving), the issue lies in "Deemed Disposal," final settlements, and correctly cancelling residency status. If a person leaves the country but remains a tax resident (having spent more than 183 days a year), they are still liable for tax on global income. Incorrect planning leads to double taxation in both the new and old countries.

Our service involves planning the change of tax residency. Specialists offer:

  • Analyzing tax residency status and determining the termination date;
  • Preparing the final tax declaration before leaving the country;
  • Assessing tax consequences of transferring assets (real estate, shares);
  • Planning business liquidation or reorganization in the context of residency change;
  • Applying Double Taxation Avoidance Treaties regarding the new jurisdiction;
  • Procedures for cancelling "High Net Worth Individual" status.
This service ensures a painless transition to a new tax regime.

Exit Tax planning is necessary in specific situations. For example, an IT specialist (Individual Entrepreneur) moves to Germany. They need to know when their obligation ends in Georgia and begins in Germany to avoid paying taxes in both. Another example is a foreign company closing a branch in Georgia. Transferring branch assets to the head office might be treated as dividend distribution or asset sale, which is taxable. Also, a shareholder leaving the country must consider that future share sales might be taxed in their new country of residence (where rates might be higher).

The legal framework relies on Article 34 of the "Tax Code of Georgia" (Residency) and international treaties. "Tie-breaker rules" are crucial for determining residency when a person has ties to two countries. A lawyer analyzes these rules to protect your interests.

The process begins with an audit of the person's or company's assets and plans. The lawyer creates an "Exit Calendar" — when to sell assets? When to close accounts? With the help of a specialist on Legal.ge, you can minimize fiscal losses when changing your place of residence or business.

Legal.ge is a platform for accessing international tax experts. Crossing borders changes not only the environment but also tax obligations. Prepare for changes with professionals.

Updated: ...

Specialists for this service

Loading...