VAT Refund Claims are one of the most attractive yet complex processes for businesses. Georgia operates an automatic VAT refund system, launched in 2019. Under this system, if a company accumulates a surplus (e.g., due to exports or large investments where input VAT exceeds output VAT), this amount is automatically reflected on the "Refund Card." However, "automatic" does not mean instant or guaranteed. Actually receiving the money into a bank account requires sending a special request from RS.ge. In certain cases, especially for large amounts or new companies, the request triggers the risk management system, which may lead to a desk or field tax audit. Refunding the surplus is the best way to increase business liquidity, as this is your legitimate money that is "frozen" in the state's account.
What Does VAT Refund Service Cover?
Specialists on Legal.ge help you receive funds safely and quickly. The service includes:
- Surplus Analysis: Studying the sources of the surplus before claiming (Where did the money come from? Are all invoices in order?) to rule out risks.
- Claim Preparation: Formulating an electronic request on RS.ge to transfer the funds to a bank account.
- Tax Communication: Preparing responses and submitting documentation if the Revenue Service requests additional information.
- Flaw Correction: Identifying and fixing discrepancies if the system detects mismatches (e.g., between declarations and invoices).
- Audit Support: If the refund claim triggers an inspection, working with auditors to confirm the validity of the surplus.
Common Situations and Scenarios
The most frequent scenario involves exporters: a company exports products (0% VAT) but buys raw materials locally (18% VAT). As a result, it constantly accumulates refundable amounts. A second scenario is investment: a new factory purchased expensive machinery and paid import VAT, but has not yet started selling products. It has a large surplus needed to repay a loan. A third, risky scenario: a company claims a refund, but it turns out that one of the suppliers from whom VAT was credited is fictitious ("commodityless"). In this case, instead of a refund, the company receives a fine and cancellation of the credit. This is why a preliminary check is essential.
Georgian Legal Framework
The VAT refund procedure is regulated by Article 63 of the Tax Code of Georgia ("Refund of Excessively Paid Tax Amount") and the Minister of Finance's Decree "On the Rule for Refunding Excessively Paid Tax Amounts." The system works on an automatic risk assessment algorithm. If the system assigns the company a "Green Corridor," the money is refunded automatically. "Yellow" and "Red" corridors require additional study or inspection. The refund occurs no later than 1 month after submitting the request (if no inspection is appointed).
Step-by-Step Service Process
When hiring a specialist on Legal.ge, the first step is to study the "Personal Tax Card" on RS.ge. The specialist checks if the surplus is recognized by the system. In the second stage, a quick review of declarations from recent periods takes place. If everything is in order, an electronic request is sent. If the system halts the refund, the specialist contacts the tax officer to find out the reason. The process concludes when the amount is reflected in your bank account or transferred to cover other taxes (e.g., profit tax).
Why Choose Legal.ge?
Getting money back is a pleasant process, but it carries risks. Legal.ge gives you access to experts who know how the refund algorithm works. They will help you avoid unnecessary attention from the tax authority and ensure that your rightful money returns to the business quickly and safely.
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