TAX & LEGAL NEWSLETTER 2018 No.11
05 October 2018
Amendments to the Law
Exemption from personal income tax
On 24 October amendments came into effect in Article 82, section 1, subsection “z7b” and Article 99, section 1, subsection “z2”. These subsections assumed exemptions from personal income tax (Article 82) with regard to the compensation for the property confiscated under Article 21 of the Constitution of Georgia and corporate income tax (Article 99) the profits received from such compensation.
Article 21 of the Constitution of Georgia regulated the right of ownership. According to the amendment to the Tax Code Article 21 of the Constitution is replaced by the Article 19 since the right of ownership is already regulated by this article of the Constitution. Consequently, the amendment to the Tax Code is stipulated by the amendment to the Constitution of Georgia. The content of tax benefit remains unchanged in the above-mentioned articles.
The amendment is effective only after the oath of President of Georgia elected in the next elections.
Amendments to the Order
Movement of goods within the customs territory of Georgia
Amendment to the Article 2 of the Order №290 by the Minister of Finance of Georgia restricting the importation and/or exportation of wheat and meslin flour, also rye flour to and from the customs territory of Georgia to rail and marine transport only shall be effective of 1 October 2019, instead of 15 September 2018. In particular cases, with the consent of Revenue Service, importation and exportation of the mentioned goods may also be allowed by means of motor transport.
The amendment came into effect from1 October 2019.
Rule of filling in the income tax return
The amendment was made to the administration order (№996) of the Minister of Finance of Georgia, in particular to the rule of filling in the personal income tax return. The amendment was made due to the corresponding amendment to the article 154 of Georgian Tax Code which stated that tax agent is not liable to withhold personal income tax at the source of payment while paying the income to VAT payer individual, notaries, private bailiffs, individuals with the status of microbusiness or fixed taxpayers. Accordingly the data into the box 19 of the declaration shall be included in the exclusion of the above-mentioned disbursements. The same box shall also carry the data on disbursements made to the individuals that are the members of the partnership who are not registered as individual entrepreneurs and/or VAT payers.
The amendment is effective of 13 September 2018 and applies to the legal relations arising from 1 January 2018.