International controlled operations Availability of goods Adjustment of customs valueThat obligation was imposed
As a result of the corresponding change made in the relevant order of the Minister of Finance, in the case of the existence of an internationally controlled operation, the corresponding obligation to adjust the customs value of the goods and charge the tax was established.
According to Chapter XVI of the Tax Code, an internationally controlled operation (Transfer pricing) is considered an operation that is concluded:
- between a resident person of Georgia and a mutually dependent person.
- between a resident of Georgia and a resident of a country with preferential taxation (so-called offshore).
As it is known, during such transactions, the resident person of Georgia is obliged to submit the relevant documentation within 30 days after the request from the tax authority, which will confirm that the price of the concluded transaction corresponds to the so-called The market principle, or roughly speaking, the market price. In the event that the compliance of the mentioned transaction price with the market principle is not confirmed, the revenue service can impose profit tax and sanction amount on the company, for example, in the case of "expensive purchase" of goods/services purchased from the above-mentioned persons or "cheap sale" of goods/services to such a person, however, It should be noted that, for example, in the case of imported goods, there was no direct reference in the legislation regarding the use of the mentioned approach, for example, in relation to import VAT.
On February 2024, 16, an amendment was published and entered into force immediately after publication in the instruction of the Minister of Finance "On approving instructions on the movement and clearance of goods in the customs territory of Georgia", which states that In the case of a transaction concluded at a price different from the market price of the controlled operation, a person may be charged a tax and sanction, e.g. Even in the case of a commodity operation, for example, an import operation.
According to the amendment, in case of purchase of goods from a related party, if according to the rules of evaluation of international controlled operations:
- If the original value of the goods increases, then the customs value determined by the customs declaration must be corrected by making a change in the relevant customs declaration. In addition, when goods launchThe subsequent control is carried out at the initiative of the customs body, the declarant will be charged with the responsibility stipulated by the Customs Code of Georgia. And when such control is carried out on the basis of the declarant's written statement about making changes to the customs declaration, the declarant will not be held responsible.
- If the original value of the goods decreases, then the customs value determined by the customs declaration is not subject to adjustment and the declarant will not be held responsible under the Customs Code of Georgia.
It turns out that if the importer has purchased the goods from a mutually dependent person or the so-called from a person registered in an offshore zone and after import it is determined that the purchase price of these goods is less than the market value determined under the controlled operation chapter, in case the taxpayer does not correct the customs declaration, the revenue service will for example Charge the amount of import VAT and the corresponding sanction from the amount of the difference.
It should be noted that in the version existing before the change of the order, in the case of buying goods from a mutually dependent person (controlled operation), the issue of increasing/decreasing the value of the goods recorded in the customs declaration and accordingly charging taxes/sanctions related to import was not considered separately, although the general case was considered, according to which the person obliged was addressed to the customs authority in order to change the customs value of the goods.
For more details, see the change at the following link:
https://infohub.rs.ge/ka/workspace/document/788b2f29-805e-4f84-b26b-6a2f006a83b2