The Right to a VAT Refund and Its Sources
A taxable person acquires the right to a refund of a VAT amount where in a reporting period the creditable VAT exceeds the VAT to be assessed — the classic excess scheme where the payable VAT on purchases exceeds that on sales. Other sources exist as well: a grant recipient who purchased goods or services under a grant agreement may credit or refund the paid VAT on the basis of a tax invoice or a document confirming payment into the budget on reverse charge; in that case the document must be presented to the organ within 3 months of the end of the month of the taxable operation. A special rule concerns a foreign citizen: on taking goods purchased in Georgia out of the territory the person may refund the VAT paid, where the export takes place within 3 months of purchase and the value per one receipt exceeds 200 lari without VAT; the refund rests on a special receipt issued by an authorized seller.
Note the detail: the procedure of this refund — the rules, the criteria to be met by the authorized seller of the goods, and the list of goods to which the rule does not apply — are determined by the Minister of Finance, so the practical details are transferred to a ministry-level normative act.
The General Rule of Refunding Overpaid Amounts
The VAT refund rests on the general mechanism for refunding overpaid amounts: where the amount of taxes or sanctions paid by the taxpayer exceeds the assessed amount, the tax organ, on the person's request, refunds the overpaid amount no later than 1 month from the submission of the request. Where the paid amount exceeds acknowledged tax debt, the organ applies the excess to cover subsequently assessed and acknowledged debt — existing indebtedness is thus subject to automatic apportionment before refund. The case of an amount incorrectly written off by an incasso order of the tax organ is resolved under the same regime.
The law also defines two cases of a faster refund: an amount incorrectly written off by an incasso order of the tax organ — including one arising from the simultaneous execution of the incasso order by two or more banking institutions — is refunded to the taxpayer no later than 15 days of the submission of the application; and in individual cases, toward a person carrying out electronic declaration, an automatic refund of the overpaid tax is also possible. A refund without a request exists as well — by decision of the head of the Revenue Service; the rules and conditions of these regimes are determined by the Minister of Finance of Georgia.