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Foreign Income Reporting

Is money transferred from abroad taxable?

The transfer itself is not taxable, but the underlying income might be. If it's payment for work done in Georgia, it is taxable. If it's a gift or loan, it's generally not.

Do I pay tax on foreign dividends?

Dividends from a non-resident company are generally considered foreign source income and are exempt from income tax in Georgia for individuals.

What if I paid tax on this income in another country?

If there is a Double Taxation Treaty, you can usually credit the foreign tax paid against your Georgian tax liability.

Do I need to report cryptocurrency profits?

Currently, profit from selling crypto assets is typically considered foreign source (exempt) for individuals, but rules are evolving. Consulting a lawyer is advised.

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In the era of globalization, more and more Georgian residents (both citizens and foreigners) receive income from sources outside the country. Foreign Income Reporting and taxation is one of the most frequently misinterpreted issues in the Georgian tax system. There is a widespread myth that any "foreign money" is automatically tax-exempt. In reality, the Tax Code clearly distinguishes between "income received from a foreign source" and "remuneration received from abroad." Ignoring these nuances often leads to significant tax liabilities.

The Foreign Income Reporting service helps you accurately determine your tax obligations, utilize legal exemptions, and avoid penalties. Legal.ge connects you with experts who can provide the correct legal qualification for your international income streams.

What Does This Service Cover?

The service includes detailed analysis and technical assistance:

  • Income Source Qualification: Determining whether income is considered "Georgian source" (taxable) or "foreign source" (potentially exempt).
  • Passive Income Analysis: Explaining taxation rules for dividends, interest, royalties, and capital gains (stock sales).
  • Tax Credits: Crediting taxes paid abroad against Georgian tax liabilities to prevent double taxation.
  • Annual Declaration Preparation: Filing the annual Personal Income Tax return by March 31.
  • Past Period Correction: Auditing past periods and filing amended declarations with minimal damage if reporting was missed in previous years.

Common Scenarios

Situations where professional intervention is necessary:

  • Foreign Stock Trading: An individual trades on international exchanges (e.g., NYSE, NASDAQ) and makes a profit. They need to determine if capital gains are taxable.
  • Remote Employment: A Georgian resident works for a German company under a contract. The company transfers the salary but does not withhold Georgian tax. The individual is obliged to declare this income themselves.
  • Real Estate Abroad: A resident rents out an apartment in Turkey or Spain. Income is deposited into a Georgian or foreign bank.
  • Online Business: Income comes from YouTube, Upwork, or other digital platforms.

Georgian Legal Framework

This area is regulated by the Tax Code of Georgia. The most important articles are:

  • Article 104 (Source of Income): Defines what type of income is considered derived from a source in Georgia. For example, income received from performing services within Georgia is Georgian source, regardless of where the payment comes from.
  • Article 82 (Exemptions): Exempts income received by a natural person (including a resident foreigner) from a foreign source. The lawyer's role is to prove that specific income is indeed "foreign source."

Service Process

Specialists on Legal.ge offer:

  1. Documentation Review: Analyzing bank statements, contracts, and foreign tax documents.
  2. Legal Opinion: Written justification of why specific income is taxable or exempt.
  3. Declaration: Filing the electronic declaration on the RS.ge portal.
  4. Representation: Communicating with tax authorities if additional questions arise.

Why Choose Legal.ge?

Incorrect reporting of "foreign income" is one of the most common mistakes leading to penalties. Legal.ge allows you to collaborate with experienced tax lawyers who will accurately distinguish between taxable and non-taxable income. Protect your finances with professional help.

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Specialists for this service

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