Defining Non-Residence and Its Criteria
Non-resident taxation in Georgia begins with the determination of status. Under Article 34 of the Tax Code a physical person is considered a resident of Georgia for the entire current tax year if he or she is actually present on the territory of Georgia for 183 days or more in any continuous period of 12 calendar months ending in that tax year. The same article provides that time spent abroad specifically for medical treatment, vacation, business travel or study counts as time actually present, and a day is counted as a day of presence regardless of its duration.
The exclusions are also defined: the time of presence does not include periods when the person was in Georgia with diplomatic or consular status, as an employee of an international organization, in transit from one foreign country to another, or for medical treatment and vacation. The status is determined for each tax period separately, and days for which the person was already counted as a resident in the previous period are not considered again. The law also contemplates granting residency to persons endowed with significant property and to foreign citizens, under a procedure determined by the Minister of Finance.
Permanent Establishment and Its Boundaries
Article 29 treats as a permanent establishment a defined place through which a foreign enterprise or a non-resident physical person carries on economic activity in Georgia in whole or in part. It is equated with a construction site, an assembly or installation object, rigs and ships used for the exploration of natural resources, the fixed base of a non-resident physical person, and also the place of management, a branch, a representation, a division, a bureau, an office, an agency, a workshop, a mine and other subdivisions. The management rule is particularly important: the management of a foreign enterprise by another person in its name for more than 3 months constitutes a permanent establishment.
The negative list is equally detailed: the activity of an independent intermediary, agent or broker does not create a permanent establishment under defined conditions; mere ownership, mere secondment of employees and mere control likewise do not. Nor is an establishment treated as permanent if it is used only for the storage or display of goods, for keeping stock for processing by another person, for the purchase of goods or collection of information, for preparatory or auxiliary activities, or for the preparation or signing of contracts.
Treaties and Withholding at the Source
International experience with double taxation becomes relevant in Georgia through the treaty mechanism: agreements concluded between states determine which country has the right to tax which income. The Georgian Code regulates this sphere with a separate norm and places the use of benefits into a procedural frame: enjoying a tax benefit defined by an international agreement on the avoidance of double taxation and the refund of tax paid in Georgia operate under one procedure determined by an order of the Minister of Finance.
Withholding at the source is equally relevant for non-residents: payers of salary, dividends, interest and royalties act as tax agents. Where salary is paid by a non-resident employer and the expense is not attributable to its permanent establishment, the employee may calculate, declare and pay the tax personally under the procedure established by the Minister of Finance.
A special exception stands out in oil and gas operations: where operations defined by the corresponding law are carried out, the rendering of services by non-resident subcontractors is not subject to the general rule on permanent establishment. These details are precisely the points where incorrect qualification changes the tax outcome.
Note also the counting nuance: although the residence test looks mechanical, its outcome depends on documentary support — entry records, purpose of travel and the treatment of short absences. A person applying the test must be ready to prove both presence and exclusion, because the burden of the correct calendar ultimately shapes the tax result.
Frequently Asked Questions About Non-Resident Taxation
How many days make a person a resident?
183 days or more in any continuous 12-month period ending in that tax year; time spent abroad for treatment and vacation also counts.
What creates a permanent establishment?
An office, branch, construction site, and management of an enterprise in its name for more than 3 months; mere ownership or control is not enough.
How is the status determined?
Separately for each tax period; days counted in the previous period are not considered again.
Can a treaty benefit be used?
Yes — on the basis of an agreement on the avoidance of double taxation; the procedure for enjoying it and for refunds is determined by an order of the Minister of Finance.
How We Help on Legal.ge
We help non-residents and international groups navigate the Georgian tax system: we analyse residence days with all exclusions, assess permanent establishment risks on specific contracts, prepare declarations, draft tax agent certificates and formalize treaty benefits. Contact us today — the correct determination of status decides the whole architecture of taxation and becomes an integral part of each international tax planning decision.