Taxing the American Side Under Internal Rules
The taxation of American natural persons and companies in Georgia proceeds under the internal rules of the Georgian Tax Code: no US-Georgia double taxation agreement exists, so treaty-based relief cannot be planned — planning rests entirely on internal norms. These conditions leave two principal instruments: the 183-day residency test and the credit of tax paid abroad. The right approach produces an outcome similar to what a treaty regime gives with other countries — though by an entirely different route.
The 183-Day Test and Day Records
Under Article 34, a natural person is considered a resident of Georgia for the whole current tax year who actually stays on the territory of Georgia for 183 days or more in any continuous 12-month period ending in that tax year. For professionals moving from the US to Georgia and remote workers this is the decisive parameter. Time spent abroad specifically for medical treatment, rest, business travel or study also counts as presence; the time of diplomatic-consular persons and international organizations' staff, transit and medical or holiday stays abroad does not. Every day counts regardless of duration; status is determined separately for each tax period, and days counted in a previous period are not counted again.
The Credit — the Principal Instrument
In the absence of a treaty, Article 124 is especially important: an enterprise is entitled to credit profit tax paid outside Georgia, for the corresponding tax year, against the tax paid in Georgia on that profit, with respect to income not received from a Georgian source. Thus profit tax paid in the US is credited against Georgian tax — and this credit rests precisely on an internal norm, not on a treaty. The cap still operates: the credited amount must not exceed the tax that would have been charged on that profit in Georgia under Georgian rules and rates. The relief mechanism of Article 125 concerns only treaty-based benefits — in the absence of an agreement with the US this route does not work, and it is precisely for this reason that all planning is shifted onto the credit and structure.
Practical Steps of US-Georgia Planning
First — a registry of days of presence: the residency decision should be assessed at the end of every quarter, not at year's end. Second — determining the structure: which income comes from a Georgian source and which does not, and where the risk of double taxation arises. Third — documentary preparation of the credit: confirmations of payment in the US and reports must be collected in advance, since the credit operates at the moment of payment, not retrospectively. Fourth — taking account of the person's status: the individual approach differs depending on whether the person is a natural person, a representative office or an independent company.
Additional Grounds of Residency and Practical Details
The 183-day test is the principal but not the only route to residency. By law, residency may also be granted to a person supported by significant property — a person defined by the Law on the Securities Market — under the procedure and conditions determined by the Minister of Finance. Moreover, where a natural person's residency in any country is not established, upon application to the tax authority the person is deemed a resident of Georgia if he or she is a citizen of Georgia; residency may likewise be granted to a foreign citizen in cases and by the procedure determined by the minister. The practical details matter too: resident or non-resident status is determined separately for each tax period, and the days by which the person was counted as a resident in a previous period are not reconsidered in the next — multi-year planning without a registry of days is therefore impossible. Remember also: time spent abroad on business travel or study counts as presence even when the person is not physically in Georgia — this rule is often surprising, and precise record-keeping is critical precisely because of it.
Frequently Asked Questions
Does a US-Georgia tax treaty exist?
No. Treaty-based relief therefore does not apply, and planning is built on internal tax rules — the residency test and the credit.
Can tax paid in the US be credited?
Yes — under the internal norm of Article 124, as profit tax, on non-Georgian-source income and up to the cap of the Georgian tax.
How do I avoid double taxation?
By planning residency, structuring income sources and fully using the credit — with correct documentation.
When do I become a Georgian resident?
With presence of 183 days or more in any continuous 12-month period ending in the current tax year.
How We Help on Legal.ge
On Legal.ge we assist with US-Georgia tax planning in the absence of a treaty: we build the registry of days, determine income sources, compute the credit within the caps and prepare the documentation before payment. Contact us before the activity in Georgia begins.