IT Company in Georgia (Virtual Zone Entity)

Virtual zone entity in Georgia is a special tax regime status which you can obtain if you work in information technologies.

Information technologies are defined as follows in the relevant regulations:

“study, support, design and implementation of computer informational systems, as a result of which we get software products”.

You can apply for this status being when you have a legal entity for example an ltd.

As a result on the services provided to foreign countries qualifying for “information technologies” the entity is free of VAT and Corporate Income Tax which means that it pays only 5% when withdrawing dividends (but actually even without this status VAT is not applicable for exported services).

To summarize 5% dividend tax is the only tax it pays on its income from information technology services provided abroad.

 On the other hand there is additional benefit in terms of VAT. Though exported services in this scenario are not taxable (though each scenario has to be checked carefully according to tax code clause 166) it is still possible to use input VAT. That means that if your ltd voluntarily registers as VAT payer and purchases some goods or services with VAT it can collect this VAT on its TAX balance and use it against other payable taxes (in example against dividend tax). That reduces level of taxes paid by the company to minimal level.

Our company helps its clients to get this status of virtual zone entity and we already have several successful clients working like this. If you qualify for such services and want to work from Georgia get in contact with us and we will support you.

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