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International IT Company

International IT Company

1. Introduction

In order to further improve the business environment in the country, to strengthen Georgia’s potential as a regional hub, and to increase the interest of multinational international IT companies, the Government of Georgia allows companies to obtain “International IT Company” status and benefit from tax breaks. The benefit applies to companies related to the shipping business as well as IT companies. See the Resolution of the Government of Georgia on International IT Company here. 

2. Benefits of International IT Company

“International IT Companies” enjoy the following tax benefits:

  • Corporate Income Tax – 5%

    On dividend payment instead of the usual 15%

  • Salary Income Tax – 5%

    On salary payment instead of the usual 20%

  • Dividend Income Tax –0%

    On dividend payment instead of the usual 5%

  • VAT on services abroad - Exempt

    Delivery of services in a foreign country is not subject to VAT

  • Property Tax (other than land) – Exempt

    On a portion of the property used within the scope of the activity permitted by the government.

  • Dividends paid by an International Company are not taxable at the source of payment and are not included in the gross income of the person receiving the dividend.
  • International Company has the right to reduce the amount of taxable corporate income by the expense of the salary paid to the resident in Georgia and at the expense of scientific-research, design and test-design services.

3. The terms and conditions of granting the International IT Company status

International IT Company status may be granted to a Georgian enterprise, including a representative of a non-resident enterprise in Georgia if it has at least 2 years of experience in this permitted activity. The list of permitted activities includes:

IT company formation in Georgia

IT Services:

  • Software release
  • Computer game releases
  • Other software realises
  • Computer programming, consulting and related activities
  • Computer programming activities
  • Consulting activities in the field of computer technology
  • Computer asset management activities
  • Other activities of information technologies and computer services
  • Production and/or delivery of a digital product, including software support and delivery of an updated version
  • Website development and/or delivery
  • Web hosting, remote maintenance of software and hardware
  • Software and relevant updates
  • Providing images, texts and information to ensure access to the database
  • Remote administration of the system
  • Online supply of allocated memory capacity
  • Access to or download software (including procurement/accounting software or antivirus software) and its updates
  • Banner advertising blocking programs
  • Downloadable drivers, such as software that connects computers to peripherals (such as a printer)
  • Automatic online installation of filters on websites
  • Automatic online installation of brand mailers (firewalls)
International Company Status in Georgia

Commercial and technical services related to the shipowner and/or ship ownership, including:

  • Rental of a ship with or without a crew (barboat charter)
  • Planning and/or analysis of ship routes
  • Giving route instructions to the ship's captain agreed with the shipper
  • Stalinist time counting, disbursement report analysis and management
  • Managing disputes of a written agreement (charter) on cargo claims, commercial, legal issues and chartering
  • Organizing orders for the construction of new ships and/or the service of buying and selling used ships
  • Computer asset management activities
  • Supervising the physical condition of the ship and / or supplying the ship with relevant technical parts and/or food products
  • Coordinating shipbuilding, ship docking and repair, conducting inspections in accordance with the requirements of industry regulators
  • Ensuring compliance with the ISM Code, the flag and port state control requirements and the rules of the classification society

The above-permitted activities include services provided under a service contract.

A prerequisite for obtaining the status is that the International IT Company operates only within the scope of the above-mentioned permitted activity and has at least 2 years of experience in the activity.

An International IT Company has the right to receive other income other than the permitted activity, however, such income should not exceed 2% of the income from its permitted activity.

In case the company meets all the requirements defined by the legislation, the status is granted on the basis of the application submitted to the Revenue Service and on the basis of the issuance of the relevant ordinance by the Government of Georgia.

4. Revocation of status

The Government of Georgia makes a decision to revoke the International IT Company 1) status on the basis of a person’s application; 2) If the company carries out activities (s) other than those permitted under the status, the income from which exceeds the threshold amount; 3) If the company does not operate from Georgia and does not meet the other requirements of the status.

5. Conclusion

The status of an International IT Company has existed in the Tax Code since 2019, although the list of permitted activities has only been determined by the government since October 8, 2020, hence the tax incentives set out in this section were not actually in effect.

International IT Company status has significant tax benefits, which creates a very attractive business environment for companies, including international companies working in the field of Information Technology and Shipping. This status now aims to bring international IT companies to Georgia, employ Georgian residents, and conduct business from Georgia.

For more information or to get help with obtaining the International IT Company status contact us.

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