The Rule for Determining Residency
Under Article 34 of the Tax Code, a resident of Georgia for the entire current tax year is an individual who is physically present in Georgia for 183 days or more in any continuous period of 12 calendar months ending in that tax year. A person who during the tax year was abroad in Georgian state service is also a resident. Time spent abroad specifically for medical treatment, rest, business travel or study counts as time present in Georgia. Not counted is time present in Georgia as a person of diplomatic or consular status, as an employee of an international organization, or in transit from one foreign country to another. Planning the termination of residency starts precisely with counting these days.
Special Cases and the Periodicity of Status
Residency may be granted to a person secured by significant property under the procedure and conditions set by the Minister of Finance, and in a determined case — to a citizen of a foreign country. Where an individual’s residency is not established with respect to any country, on application to the tax authority the person is deemed a resident of Georgia if a Georgian citizen. The status of resident or non-resident is determined for each tax period, and days counted for a previous period are not counted again in the next. Article 35 defines the place of residence — the place a person habitually chooses to live; where several homes exist, the place is determined by the tax authority in agreement with the person.
After Losing Residency: What Remains Taxable
Under Article 79, income tax payers are a resident individual and a non-resident individual receiving income from a source in Georgia. After termination of residency the person is no longer taxed on worldwide income, but Georgian-source income remains taxable: under Article 80, a non-resident’s income from the sale of property is taxed on the difference between the aggregate Georgian-source income of the year and related deductions. Article 104 lists Georgian sources: employment, supply of goods, services rendered in Georgia, activity of a permanent establishment, dividends and income from the sale of shares received from a resident, interest paid by a resident, pension and stipend, royalty, income from immovable property, and shares of an enterprise whose assets derive more than 50 percent of their value from Georgian immovable property. The place of receipt of the funds is disregarded in determining the source.