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During the month of July 2024 Amendments to the tax legislation of Georgia

Kreston Georgia continues to review tax law changes and updates. This time, we offer an overview of legislative news introduced in the month of July 2024.

Table of Contents

1. Amendments to the law of Georgia

1.1 Changes due to bringing the Law of Georgia "On Cumulative Pension" into compliance with the new version

1.2 Taxation of foreign citizen's participation in games in system-electronic form

2. Changes in the orders of the Minister of Finance of Georgia

2.1 Change in excise duty declaration

3. Changes in the orders of the head of the revenue service

3.1 Determining the procedure for writing off tax debt

1. Amendments to the law of Georgia

1.1 Changes due to bringing the Law of Georgia "On Cumulative Pension" into compliance with the new version

On July 2024, 12, an amendment to the Tax Code of Georgia (hereinafter, "Tax") was published, which will come into force on May 2025, 1. The implementation of the change is due to the changes made in the Law of Georgia "On Accumulated Pension", as a result of which the management structure of the agency was changed and the name of the pension agency was changed to the name "Pension Fund".

As a result of the change, the Tax Code of Georgia came into compliance with the new edition of the Law of Georgia "On Accumulated Pension", in particular, the name of the Pension Agency in the Civil Code was changed to the name of the Pension Fund, and in this regard, the new edition was established in Articles 39, 154 and 238 of the Civil Code. E articles.

Similarly, in order to comply with the new edition of the Law of Georgia "On Cumulative Pension", on July 2024, 12, an amendment to the Code of Administrative Offenses of Georgia was published, which will come into effect on May 2025, 1. As a result of the change, the new edition was formed in the Code of Administrative Offenses of Georgia 2298Articles 239 and XNUMX and the name of the pension agency was changed to "Pension Fund".

In addition, Article 165 of the Code of Administrative Offenses of Georgia was established with the new edition.11Article, which determines the sanctions in case of violation of the obligation to make pension contribution by the employer. In particular, according to the version before the amendment, a warning was provided for the first case of violation of the obligation to make pension contribution by the employee provided for in article 3, paragraph 6, subparagraph "d" of the Law of Georgia "On Cumulative Pension", and for the same action committed repeatedly - a fine of 500 GEL . According to the new edition, the mentioned case, as well as the violation of other obligations, will lead to a general fine, which means:

  • Violation of the employer's obligation to make pension contributions on his own or on behalf of the employee (regardless of the number of detected violations) will result in a fine of 500 GEL.
  • The same action, committed repeatedly, will result in a fine of 1 GEL.

We remind you that according to Article 3, Clause 6, Sub-Clause "D" of the Law of Georgia "On Cumulative Pension", an employee whose income tax is not subject to withholding at the source of payment shall, no later than 5 working days after receiving the salary, in the manner determined by the Pension Agency pension contribution in the amount of 4% of the taxable salary, and the employer of this employee is obliged to compensate him for the pension contribution in the amount of 2% of the taxable salary.

For detailed information about the change, see the link:

https://matsne.gov.ge/ka/document/view/6225535?publication=0

https://matsne.gov.ge/ka/document/view/6225890?publication=0

1.2. Taxation of foreign citizen's participation in games in system-electronic form

On July 2024, 11, an amendment to the Tax Code of Georgia was published, which will come into force on December 2024, 1. The mentioned change was caused by the amendment to the Law of Georgia "On Organization of Lotteries, Gambling and Profitable Games" and refers to the participation of foreign citizens in electronic games. 

The object of taxation with income and profit taxes was determined, namely:

  • 80 was added to Article 7 of the Tax Code1 Part, and Article 81, Article 32 Part according to which a natural person who, as a result of the participation of citizens of a foreign country in systemically-electronically organized bookmaker games, receives income from the organization of bookmaker games in a systemized-electronic form, as part of the mentioned activity, the bets received from players with the citizenship of a foreign country and the profits paid to these players are subject to income tax taxation. the difference between

The taxable income received in such form is taxed at 5%.

In addition, profits received by citizens of foreign countries as a result of participating in system-electronic gambling games and/or system-electronic organized totalizer games and money withdrawn from a system-electronic gaming account are exempted from income tax.

  • 97 was added to Article 9 of the Tax Code3 part, and part 98 was added to Article 5, according to which the object of taxation of a person with profit tax is the difference between the bets received from players with the citizenship of a foreign country and the profit given to these players in the case of participation of foreign citizens in system-electronically organized totalizer games.

Taxable profit in the mentioned activity is taxed at 5%.

According to the above-mentioned taxation objects, the reporting period in the part of the organization of games of the totalizer in a system-electronic form is a calendar month.

For detailed information about the change, see the link:

https://matsne.gov.ge/ka/document/view/6206774?publication=0

2. Changes in the orders of the Minister of Finance of Georgia

2.1 Change in excise duty declaration

On July 2024, 4, an amendment to the "Tax Administration" instruction, approved by Order No. 996 of the Minister of Finance, was published and immediately after its publication, it came into effect. In particular, Section V and Section VI of the Annex to the Instruction No. IV-01, Excise Declaration, were formed with a new edition.

As a result of the change, the SES ESN code "3824 90 980 01" has been replaced by the new SES ESN codes "2404 12 000 00 and 2404 19 900 00" in the specified divisions. The change is caused by the new edition of the National Commodity Nomenclature of Foreign Economic Activities approved in 2024, and in terms of content, both the old and new codes indicated in the mentioned sections of the declaration refer to nicotine and tobacco substitute products.

For detailed information about the change, see the link:

https://matsne.gov.ge/ka/document/view/6213596?publication=0

3. Changes in the orders of the head of the revenue service

3.1. Determining the procedure for writing off tax debt

On July 2024, 1, an amendment was published in the order of the head of the Revenue Service No. 13446 "On the procedure for the production of personal registration cards of taxpayers" regarding the approval of methodological instructions. As a result of the change, a new article 9¹ was added to the methodical instruction and based on it, the rule of tax debt write-off determined by section 309 of Article 37 of the Transitional Provisions of the Civil Code was explained.

As it will be explained to you, in accordance with the changes implemented in Article 2024 of the Transitional Provisions of the Civil Code of Georgia from June 5, 309, the recognized tax debt (tax amount and fine) of an individual, arising before January 2021, 1 and existing at the time of writing off, is subject to write-off in accordance with the procedure established by the Minister of Finance of Georgia, and Saurav charged on it. It was in accordance with this record that the debt write-off rule was developed. 

We would also like to remind you that the tax debt of an individual can be written off according to 2010 of the Order No. 31 of the Minister of Finance of Georgia dated December 994, 68.1 In accordance with the article, in the following cases:

a) based on the taxpayer's statement;

b) on the basis of the decision of the body reviewing the dispute;

c) without addressing the taxpayer (programmatically and/or through individual study).

The new article of the Methodological Reference defines in detail the rules and conditions according to which the tax debt incurred by an individual before January 2021, 1 will be written off. Among them, the new Article 9¹ of the aforementioned order defined the following: 

  • According to Article 309, Part 37, Subpoint "D", all natural persons (including entrepreneurial natural persons) who have a recognized tax debt arising before January 2021, 1 and existing at the time of writing off, will be subject to the study of the issue of debt write-off. Charged with saura. 
  • Transactions reflected on the taxpayer's personal registration card after January 2021, 1, except for the transfer of tax debt from the temporary card to the main card, incurred before January 2021, 1, will not be subject to write-off. 
  • In the event that the amounts charged to the personal registration card based on the tax request(s) issued before January 2021, 1 were adjusted after January 2021, 1, the tax debt determined as a result of the corrected tax request(s) will still be considered as the debt incurred before January 2021, 1. 
  • When writing off the debt, the balance and/or excess of the fee and administrative fine card will not be taken into account.

Examples have also been added to the methodological reference, which you can see in detail at the given link.

The change is effective from June 2024, 25N.

For detailed information about the change, see the link:

https://matsne.gov.ge/ka/document/view/6209236?publication=0

 

Creston Georgia Ltd

managing partner                                                             Davit Papiashvili

Head of Tax Audit Department                     Chabukiani from Rusu


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