During the month of February 2026 Amendments to the tax legislation of Georgia
Kreston Georgia continues to review tax law changes and updates. This time, we offer an overview of the legislative news introduced in the month of February 2026.
Table of Contents
1. Amendments to the Orders of the Minister of Finance of Georgia and the Head of the Revenue Service
1.1. Change in the rules for writing off excise goods marked with excise stamps
1.2. Changes regarding special taxation regimes (micro, small, fixed)
1.3. Amendment to the Rules for Submitting Information on International Controlled Transactions
1.4. Rules for refunding withholding tax at the source of payment to the taxpayer
1.5. Extension of the deadline for exemption from fines for violating the mandatory VAT registration obligation
1. Amendments to the Orders of the Minister of Finance of Georgia and the Head of the Revenue Service
1.1. Change in the rules for writing off excise goods marked with excise stamps
On February 5, 2026, Orders N33 and N34 of the Minister of Finance of Georgia were published, based on which amendments were made to the Instruction “On Tax Administration” approved by Order N996 of the Minister of Finance, and also to the Instruction “On Conducting Current Control Procedures, Write-off of Commodity and Material Values, Repayment of Recognized Tax Debt, Implementation of Measures to Ensure Payment of Tax Debt, and Approval of the Procedure for Handling Violations” approved by Order N994 of the Minister of Finance. The amendment made concerns the write-off of excise goods marked with excise stamps.
In particular, as a result of the amendment, paragraphs 6 and 7 of the following content were added to Article 32 of the Instruction approved by Order N994, which establishes the procedure for writing off tangible assets:
"6. Manufactured by the manufacturer in Georgia The write-off of excise goods marked with excise stamps is carried out on-site and is completed by complete destruction.
- In the case provided for in paragraph 6 of this Article, when writing off excise goods produced in Georgia, marked with an excise stamp by the manufacturer, an authorized person of the tax authority shall A sample of at least 2% of the total quantity of excisable goods specified in Annex No. 24 to this Rule shall be subject to on-site inspection. The selection is carried out according to the largest package of excise goods, and from each box - according to the smallest package of at least 2% of the excise goods.
Based on the above changes, appropriate adjustments will be made to the "Document on Write-off of Commodity and Material Values" (Appendix No. 24) and the statement "On Confirmation of Write-off of Commodity and Material Values" (Appendix No. 23).
In addition, the amendment affected the instruction approved by Order No. 996, namely Article 81 of the instruction.2 5 has been added to the article that defines the rights and obligations of business entities and the selected person when implementing mandatory marking of excise goods/mandatory marking of non-excise goods by the selected person.1 Paragraph 19 was added to Article 112 of the Instruction – “Transitional Provisions”.1 Clauses according to which, When writing off excise goods produced in Georgia marked with excise stamps by the manufacturer, the excise stamps are considered unused and are not subject to excise tax. And from January 1, 2025 to August 1, 2025, excise stamps marked by the manufacturer on excise goods produced in Georgia, written off in the form of complete destruction, with the serial numbers/serial number range indicated by the manufacturer in the application submitted to the Revenue Service, It is considered unused and is not subject to excise tax.
The change took effect immediately upon publication, i.e. from February 5, 2026.
For detailed information about the change, see the link:
https://matsne.gov.ge/document/view/6777909?publication=0
https://matsne.gov.ge/document/view/6777928?publication=0
1.2. Changes regarding special taxation regimes (micro, small, fixed)
On February 6, 2026, Order No. 38 of the Minister of Finance of Georgia was published, on the basis of which an amendment was made to the Instruction “On the Application of Special Taxation Regimes” approved by Order No. 999 of the Minister of Finance. The amendment affected both individuals with micro and small business status, as well as individuals with fixed taxpayer status. We present each amendment in detail:
- According to the regulation before the change, if the total combined income of an individual with micro business status exceeded 30,000 GEL or he started using the labor of an employee, he had the right to apply to the tax authority within 15 days from the date of this moment to obtain small business status, and in such a case, the income received by him in the period before granting small business status was subject to taxation in accordance with the rules established for micro businesses. However, in case of violation of the aforementioned 15-day period and, accordingly, failure to exercise this right, his micro business status was automatically revoked and the income received by him during the reporting year was subject to income tax taxation in accordance with the general rules.
As a result of the change, even in the event of a violation of the above-mentioned 15-day deadline, an individual still has the opportunity to apply to the tax authority to obtain small business status and not have their total income for the calendar year taxed under the general income tax rule. In particular, if the total combined income of an individual with microbusiness status in the current tax year is (The above does not apply to income received from the types of activities specified by Resolution No. 415 of the Government of Georgia or to certain types of income that are not taken into account when calculating the aforementioned threshold.)):
a) exceeds 30,000 GEL or he begins to use the labor of a hired person and from that moment on Within 15 days An individual applies to the tax authority for small business status The microbusiness status will be revoked and the small business status will be granted from the date of exceeding the limit or from the date of commencement of the use of the hired person's labor. and the income earned by it in the period before it was granted small business status will be subject to Taxation rules for microbusinesses Accordingly;
b) exceeds 30,000 GEL or he begins to use the labor of a hired person and from that moment on After the 15-day period has expired An individual applies to the tax authority for small business status Small business status will be granted from the date of application. and the income earned by it from the beginning of the current year until the granting of small business status will be subject to income tax Taxation under the general rule;
c) Will not exceed 30,000 GEL and applies to the tax authority for small business status, an individual Small business status will be granted from the date of application. and the income earned by it in the period before it was granted small business status will be subject to Taxation rules for microbusinesses Accordingly.
- It has been clarified that an individual with microbusiness status is obliged to file a tax return. Ensure the retention of documents for a period of 3 years, Instead of 6 years, as was defined in the previous version of the instruction. This period is calculated from the end of the calendar year of the tax period for which it is necessary to determine the tax liability.
- As a result of the change, a person will be granted small business status from the date of submitting an application to the tax authority for granting small business status, instead of from the first day of the month following the month of submitting the application, as was determined by the wording of the instruction prior to the change. Accordingly, An entity is considered to have small business status from the date of application.
The rule for revoking small business status, when a person applies to the tax authority with this request before the end of the calendar year, remains unchanged and the status is considered revoked from the first day of the month following the month of application to the tax authority.
- The amendment also clarified that an individual entrepreneur whose small business status has been revoked has the right to apply to the tax authority for the status to be re-granted. From the tax year following the year of revocation of status And get the status again.
- As a result of the change, the instruction stated that if a person with small business status does not submit a "Monthly Income Tax Declaration of an Individual with Small Business Status", It is not considered that he has submitted a declaration, Based on which the amount of tax payable is zero (so-called zero declaration).
- If the status of a fixed taxpayer is to be granted to an individual, along with meeting other requirements, It has become mandatory for a natural person to be registered as an individual entrepreneur. In addition, if a person's registration as an individual entrepreneur is revoked, their status as a fixed taxpayer will also be revoked.
- The change clarifies that the status of micro and small businesses, as well as the status of fixed taxpayers, is being abolished. Death of an individual In case.
The amendment will enter into force on the 30th day after publication, i.e. March 8, 2026.
For detailed information about the change, see the link:
https://matsne.gov.ge/document/view/6780342?publication=0
1.3. Amendment to the procedure for submitting information on international controlled transactions
On February 25, 2026, Order No. 52 of the Minister of Finance of Georgia was published, on the basis of which an amendment was made to the Instruction “On Tax Administration” approved by Order No. 996 of the Minister of Finance. As a result of the amendment, Section 40 of the Instruction1 A new paragraph 10 has been added to the article “Filling in the Monthly Income Tax Declaration”, and a new paragraph 20 has been added to the article 41 “Filling in the Income Tax Declaration”.
The change applies to companies that conduct operations with foreign partners (interdependent persons and/or residents of a country with preferential taxation). The main goal of the change is Stricter and more systematic monitoring of internationally controlled operations.
Specifically, based on the change, the monthly income tax return and the annual income tax return will be submitted for the March reporting period. (The deadline for submission is April 1 of the year following the reporting year and is submitted by those individuals who have not switched to the so-called Estonian model of profit tax) It has become mandatory to fill out another new appendix, which reflects information on internationally controlled transactions provided for in Articles 126-129¹ of the Tax Code of Georgia.
This appendix is filled in if:
- In the case of a monthly income tax declaration – by an individual during the previous calendar year;
- In the case of an annual profit tax declaration – during the calendar year.
The total volume (amount) of international controlled transactions carried out by the person exceeds 500,000 GEL. In addition, the total volume of the above-mentioned transactions also takes into account the market value of the controlled transactions carried out free of charge and the volume of existing accounts payable and/or receivables.
For example,
FACTUAL CIRCUMSTANCES:
In 2020, a credit line agreement for 2,000,000 USD was signed between LLC “A”, a resident of Georgia, and enterprise “B”, a resident of the Swiss Confederation. “B” is the owner of 52% of the shares of LLC “A”. In 2020, 2022, 2023 and 2024, 8 loan agreements were signed based on the credit line agreement, a total of 1,500,000 USD was received, including the following loans received in 2024:
1) 15.03.2024 – 350,000 USD;
2) 15.08.2024 – 300,000 USD.
In addition, the loans received in 2020-2023 have been repaid in full. On December 31, 2024, LLC “A” repaid 250,000 USD of the principal amount of the loan received, and on the same date, the interest payable by LLC “A” amounted to 97,500 USD, which was also paid in full. At the time of filing the declaration, LLC “A” does not possess documentation related to the valuation of operations.
Result:
In the declaration for the reporting month of March 2025, LLC "A" will reflect the following information in two lines in the new annex to the declaration:
Operation I:
1) In the first - 3rd columns, indicate - the name of the enterprise "B", its identification number, country of residence - the Swiss Confederation;
2) Column 4 reflects the form of interdependence – direct ownership of more than 50 percent of the enterprise;
3) Column 5 reflects the type of operation performed – loan received;
4) Column 6 reflects the total amount of the loan received during 2024 – 650,000 USD, and column 7 – the amount of the loan in accordance with the official exchange rate of the GEL against the relevant foreign currency determined by the National Bank of Georgia on the day of the transaction – 1,744,340 GEL (350,000*2.6758 (US dollar exchange rate against GEL as of 15.03.2024) + 300,000*2.6927 (US dollar exchange rate against GEL as of 15.08.2025));
5) Column 8 reflects the balance of accounts payable – 400,000 USD (650,000 – 250,000);
6) Column 9 reflects the date of the credit line agreement signed between the parties – 2020;
7) Column 10 reflects information on the possession of documentation related to the assessment of controlled operations – “I do not have”.
Operation II:
1) In the first - 3rd columns, indicate - the name of the enterprise "B", its identification number, country of residence - the Swiss Confederation;
2) Column 4 reflects the form of interdependence – direct ownership of more than 50 percent of the enterprise;
3) Column 5 reflects the type of operation performed – interest expense;
4) Column 6 reflects the amount of interest expense for 2024 – 97,500 USD, and column 7 reflects the amount based on the official exchange rate of GEL against the relevant foreign currency set by the National Bank of Georgia on the day of the transaction – 273,663 GEL (97,500*2.8068 (US Dollar exchange rate to GEL as of 31.12.2024));
5) Column 8 reflects the balance of interest debt – 0;
6) Column 9 reflects the date of the credit line agreement signed between the parties – 2020;
7) Column 10 reflects information on the possession of documentation related to the assessment of controlled operations – “I do not have”.
Results, possible errors and ambiguities
As already mentioned, the above-mentioned amendment requires the submission of detailed information on controlled transactions of the previous year if the volume of such transactions exceeds 500,000 GEL, which is why companies will have to spend additional time to submit this information. In addition, when filling out this form, the taxpayer is obliged to indicate whether he has prepared documentation for the controlled operation (I have/don't have/will prepare/will prepare), which implies the implementation of additional control mechanisms by the tax authority in this direction. The obligation to prepare documentation for the controlled operation (the so-called Transfer Pricing Conclusion) (which is not a cheap service in Georgia for various reasons) was imposed on companies even before the enactment of this amendment, however, as a result of the submission of such information, the private sector becomes more accountable to the tax authority.
Although the intention of the Revenue Service and the Ministry of Finance is clear, several possible errors are clearly visible in the amendment, namely, according to the example presented in the amendment, the obligation to submit the mentioned information is established for the information submitted for the reporting period of 2025 and beyond. In the latter case, it is unclear why information for 2024 is submitted (as mentioned in the example) if the mentioned amendment applies to the information submitted for the reporting period of 2025 and beyond. In addition, the amendment contains other types of ambiguities, regarding which we hope that the shortcomings will be corrected as soon as possible.
The amendment became effective upon publication, i.e. from February 25, 2026, and its effect extended to information presented for the 2025 and subsequent reporting periods.
For detailed information about the change, see the link:
https://matsne.gov.ge/ka/document/view/6791670?publication=0
1.4. Rules for refunding tax withheld at the source of payment to the person
On February 6, 2026, Order No. 37 of the Minister of Finance of Georgia was published, on the basis of which an amendment was made to the Instruction “On Tax Administration” approved by Order No. 996 of the Minister of Finance. As a result of the amendment, a new 39 was added to the Instruction.6Article 1 – “Rules for refunding tax withheld at source for persons benefiting from tax benefits.” The novelty is as follows:
The tax authority is authorized to refund the amount of tax withheld at source on the income received by a person (hereinafter referred to as the "Person") benefiting from the benefit specified in Part 2 of Article 82 of the Tax Code (see details below) (except for persons provided for in Subsections "a.v." and "c." of the same section) on the basis of the tax withheld at source declaration submitted by the tax agent.
For the purpose of refunding the amount of tax withheld at the source of payment A person is required to register as a taxpayer and submit an application to the tax authority. "On the use of the procedure for refunding tax withheld at the source of payment for persons benefiting from tax benefits" (Appendix No. II-087), which indicates the bank settlement account to which the specified amount should be refunded, taking into account the settled surplus on the personal registration card. In order to establish the ownership of the specified bank settlement account to a person, the exchange of information containing tax secrets, banking secrets and personal data between the Revenue Service and the banking institution is carried out on the basis of the consent expressed by the person in the same application. Tax authority for the person The tax refund is provided from the reporting period following the month of submission of the application. (20th of every month).
Person withholding tax at source In order to terminate the use of the return procedure specified in this article, Submits an application to the tax authority “On termination of the use of the procedure for refunding tax withheld at the source of payment” (Appendix No. II-088). The use of the procedure for refunding tax withheld at the source of payment specified in this article shall be terminated from the first of January of the year following the year of submission of the application.
After the refund of the amount of tax withheld at source to an individual, the submission of an amended declaration of tax withheld at source by the employer (tax agent) is the basis for recalculating the amount refunded under this article.
We would like to remind you of the tax benefits established by Article 82, Part 2 of the Civil Code. The following are not subject to income tax:
a) Taxable income received by the following individuals during a calendar year up to 3000 GEL:
a.a) Veteran of World War II, veteran of combat operations for the territorial integrity, freedom and independence of Georgia and veteran of combat operations on the territory of other states, citizens of Georgia;
a.b) a person who has been awarded the honorary title of "Mother of Georgia";
a.c) single parent;
a.d) a person who has adopted a child (within 1 year of the adoption);
a.e) a person who has adopted a child for foster care;
a.f) Taxable income received in the form of salary from a budgetary organization in a mountainous settlement during a calendar year by a person with three or more children permanently residing in a mountainous settlement (whose dependents are three or more children under the age of 18). The income tax payable on taxable income of up to 3,000 GEL received in the form of salary from a budgetary organization in a mountainous settlement during a calendar year by a person with one or two children permanently residing in a mountainous settlement (whose dependents are one or two children under the age of 18);
b) taxable income received during a calendar year by a person with a disability since childhood, as well as a person with a severe or significantly pronounced disability, up to 6,000 GEL;
B1) taxable income of up to 6,000 GEL received during a calendar year by a person who, in accordance with the legislation of Georgia, suffered a serious health injury in connection with participation in an operation for the maintenance and restoration of international peace and security or other peacekeeping activities;
c) Taxable income of up to 6,000 GEL received by a person with the status of a permanent resident of a high-mountain settlement during a calendar year from activities in a high-mountain settlement, except for income received in the form of a salary from a budgetary organization and a medical institution established by the state or a municipality.
The amendment will enter into force upon publication, i.e. from February 6, 2026.
For detailed information about the change, see the link:
https://matsne.gov.ge/ka/document/view/6779881?publication=0
1.5. Extension of the time limits for exemption from fines in case of violation of the obligation of mandatory VAT registration
On February 10, 2026, Order No. 2243 of the Head of the Revenue Service was published, based on which an amendment was made to Order No. 9021 of the Head of the Revenue Service "On Approval of Methodological Instructions on the Implementation of Certain Measures by the Tax/Customs Authority".
The amendment concerned measures to exempt a person from the fine imposed on the basis of Part 1 of Article 282 of the Criminal Code (good faith payer) on the basis of Part 7 of Article 269 of the same Code. We would like to remind you that this refers to the fine imposed on a person for activities without registration as a VAT payer, which amounts to 5% of the amount of VAT taxable transactions (excluding exempt transactions) carried out during the period of activities without registration.
Under the old version, one of the necessary conditions for exemption from the fine was that the person had to submit a VAT return before the issuance of the violation report. If the report had already been written and the person had not submitted the relevant VAT returns, the exemption was practically no longer valid.
The new editorial team introduced an "alternative time window", In particular, it is possible to submit a VAT declaration:
Deadline 1: Until the issuance of the violation report (as before);
and/or Deadline 2: By the date of the decision of the Service Department on exemption from the fine based on Part 7 of Article 269, but with one important condition: the declaration must be submitted no later than the deadline established by the Civil Code (the 15th of the following month).
Therefore, previously, if the tax authority promptly issued a protocol before the taxpayer sent the VAT declaration, the person lost the opportunity to have the fine waived. Now, if the taxpayer has not violated the legal deadline for submitting the declaration (the 15th of the following month) and the service department has not yet made a decision on the waiver of the fine, the person retains the chance to be exempted from the fine even if the protocol has already been drawn up and the VAT declarations have not yet been sent.
The other necessary conditions for the removal of the fine remain unchanged, as a reminder, these are:
a) Activities without mandatory VAT registration are identified directly by the taxpayer, based on a relevant application to the tax authority;
b) As of the date of the Service Department's decision to draw up a report on the violation of the law provided for in Part 1 of Article 282 of the Tax Code or to exempt the taxpayer from the fine on the basis of Part 7 of Article 269 of the same Code, no recognized tax debt/recognized fee is recorded on the personal registration card;
d) In the application submitted to the tax authority for mandatory registration as a VAT payer, the person recorded the taxable turnover of VAT made in the month of submission of this application (from the beginning of the month of application to the moment of application).
The amendment entered into force immediately upon signing, i.e. from February 4, 2026.
For detailed information about the change, see the link:
https://matsne.gov.ge/ka/document/view/6783237?publication=0
Creston Georgia Ltd
managing partner Davit Papiashvili
Head of Tax Audit Department Chabukiani from Rusu