BDO Tax & Legal Newsletter / September 2021 No.6
Mariam Khuskivadze / Manager, TAX
Amendment to the Order
Value Added Tax
By the order №197 (05.08.2021) of the Minister of Finance of Georgia, an amendment has been made to the Order №996 (31.12.2010) of the Minister of Finance on Tax Administration. According to the amendment, Part 4 was added to the Article 72. According to previous edition the basis for obtaining deduction of VAT accrued on the import of goods based on the decision of the tax authority as a result of inspection was the document confirming payment of accrued VAT to the budget. The amendment further clarifies that the basis for obtaining VAT deduction is a document confirming payment of VAT to the budget, if all the following conditions are met:
- There is a decision of the tax authority to accrue VAT on the import of goods
- The amount of VAT is reflected in the tax claim submitted on the basis of the decision specified in sub-paragraph “a”
- The amount specified in the subparagraph (b) and reflected in tax claim is paid to the budget fully or partially. In case the payment is incomplete - the payment order indicates VAT in connection with the import of goods.
The amendment came into force on 7 August 2021.
Unqualified VAT payer
On 5 August 2021, Head of the Revenue Service issued order №25697 "On restriction of the right of taxpayers to issue/confirm tax invoices, tax documents and waybills in certain cases”. From the moment of enactment, the mentioned order immediately revoked the order №13617 of the Head of the Revenue Service on “Restriction of the Right of Taxpayers to Issue/Confirm Tax Invoices and Tax Documents". In the new edition it was also determined that upon the issuance of the order on "Seizure of property" to ensure the prohibition of disposing of the property provided for in the operations to be carried out in the period after the issuance of the order, in accordance with Part 2 of the Article 241 of the Tax Code of Georgia (seizure of property), the taxpayer shall be restricted from having the right to issue waybills, tax invoices and tax documents.
In this case, a waybill, tax invoice can be issued only if the taxpayer applies to the Revenue Service and submits the relevant documents, which will be examined by the Debt Management Department. No later than 3 working days after the relevant decision is made, the taxpayer will be able to issue the relevant waybill, tax invoice in accordance with the rules established by the Minister of Finance of Georgia.
This part of the order will take effect as soon as the relevant technical support is created.
On 13 August 2021, the Convention between Georgia and Japan for the avoidance of double taxation and the prevention of fiscal evasion was published.
The Convention shall enter into force on 23 July 2021 and have effect for taxable years beginning on or after the first day of January of the calendar year following that in which the Convention has entered into force.