Georgia has one of the most business-friendly tax systems in Eastern Europe in general and couple of special economic zones for IT businesses make it virtually a European IT off-shore zone.
Below is a general comparison chart of corporate tax systems in Georgia, Russia, Belarus and Ukraine with average total income to net salary efficiency rates* which shows the complete superiority of the Georgian tax system for IT companies compared to the tax regimes in Russia, Ukraine and Belarus.
| TAXES | Russia | Russia (Skolkovo Zone) | Belarus | Ukraine | Georgia | Georgia (Virtual Zone) | Georgia (International Company) |
|---|---|---|---|---|---|---|---|
| VAT | 20% | 0% | 20% | 20% | 18% (in some cases can be avoided) | 0% | 0% |
| Social Taxes (in total) | Up to 30% | 14% | 34% | Up to 22% | Not needed for foreign citizens | 0% | 0% |
| Income Tax | 13% to 15% | 13% to 15% | 13% | 18% | 20% | 20% | 5% |
| Corporate Profit Tax | 20% | 0% | 18% | 18% for residents (from 0% to 20% for non-residents | 15% | 0% | 5% |
| Dividend Tax | 8% | 8% | 12% | 5% | 5% | 5% | 0% |
| Total income to salary efficiency* | ~56% | 76,3% and lower | 54% | over 56% | 67,8% | 80% | 95% |
*Maximum percent of gross income available to payments as a net salary for IT company with zero profit and overhead costs. Calculated as: (Gross Income - VAT - Social Taxes - Income Tax) / Gross Income, %.
Our experts will guide you through the process of choosing and registration of the right taxation form or help with getting a free economic zone status (like Virtual Zone or International Company).