Double tax treaties / double tax agreements (DTA) are created mainly to eliminate double taxation between two countries. They are useful when a legal or natural person is acting / receiving income from activity in other country.
In practice, DTAs ensure that the same income is not taxed twice — once in the country where it is generated and again in the country of the taxpayer’s residence. Instead, the treaty defines which country has the primary right to tax and in what situations credits, exemptions, or reduced tax rates apply.
Georgia’s Double Tax Treaty Network
Georgia has 58 double tax agreements. List of all of them can be checked here.
It means tax residents of 58 countries can eliminate double taxation when acting in Georgia and vice versa.
For businesses and individuals, this creates a predictable and fair tax environment, making Georgia attractive for cross-border trade, investment, and relocation.
The Role of Tax Residency
One of the crucial points for erasing of double taxation is tax residency of the acting subject.
If you are a tax resident of a country that has a DTA with Georgia, you may reduce or eliminate withholding taxes on dividends, interest, or royalties received from Georgia.
Similarly, Georgian tax residents operating in a treaty country may benefit from reduced or exempt taxation abroad.
Tax residency is typically proven through a certificate of residence issued by the competent tax authority. Without this, treaty benefits cannot be applied.
Normally, the first and most important requirement is you shall be residing in that specific country for at least 183 days.
There are certain physical persons NOT residing in any country for more than 180 days and still willing to have attribution to certain countries and in these cases, they often use our service for obtaining Georgian tax residency based on being HNWIs in accordance with Georgian laws, thus eligible for personal tax exemptions for their foreign-sourced income. To read more about these please check our articles: Obtaining Georgian Tax Residency and Legislative changes to HNWI tax residency.
Second most important criteria is center of vital interests: economic and personal relation to that specific country.
All scenarios are clearly mentioned for determination of tax residency of a person IF both states are considering it as a tax resident.
What taxes are exempt?
Double tax treaties do not abolish all taxes, but they clearly define which taxes may be reduced or exempt when income crosses borders. Under Georgia’s DTAs, the most common exemptions or reductions apply to:
Dividends – Withholding tax rates are usually reduced from the domestic 5% down to 0–5%, depending on the treaty and the level of shareholding.
Interest – Payments of interest to foreign lenders are often subject to reduced withholding tax (sometimes exempt entirely).
Royalties – Licensing or intellectual property payments to non-residents are usually taxed at lower rates or fully exempt.
Business profits – Generally taxed only in the country of residence, unless a permanent establishment (PE) exists in Georgia.
Capital gains – Often exempt in the source country, with taxation rights allocated to the country of residence (exceptions apply to immovable property and shares in property-rich companies).
Employment income – Salary earned abroad may be exempt if the stay is under 183 days and other conditions are met.
These exemptions or reductions are not automatic — they apply only if the taxpayer proves tax residency and follows the required procedures (e.g., providing a certificate of residence).
What is permanent establishment
A Permanent Establishment (PE) is a key concept in double tax treaties. It determines whether a foreign company’s profits should be taxed in Georgia (or in the other treaty country).
In simple terms, a PE exists when a company from one country has a fixed presence in another country through which it carries out business activities.
Typical forms of a PE
A branch or representative office
An office, factory, or workshop
A construction site or installation project lasting more than a certain period (usually 6–12 months, depending on the treaty)
A dependent agent who habitually concludes contracts on behalf of the company
What is not a PE
- Facilities used only for storage, display, or delivery of goods
- Preparatory or auxiliary activities (e.g., market research, advertising)
- Independent agents acting in the ordinary course of their business
Why PE matters
If a PE exists: The foreign company must pay tax on the profits attributable to that PE in Georgia.
If no PE exists: Business profits are taxed only in the company’s country of residence, and Georgia cannot impose corporate income tax.
This rule protects companies from being unfairly taxed in multiple countries for the same business activities.
How do you use and apply DTAs in Georgia?
Generally, international agreements are higher in hierarchy, than the local laws, therefore DTAs prevail over Georgian tax code, however, to avoid / minimize tax issues it is recommended to follow technical rules determined to be following the requirements.
We have an Order N633 of Minister of Finance, dated 01.01.2012 On approval of the rules for the use of tax benefits specified in the international agreement on the avoidance of double taxation and the refund of taxes paid in Georgia to non-residents.
When applying treaty benefits or requesting a refund of taxes paid in Georgia, taxpayers (both residents and non-residents) must comply with the following general requirements:
Proof of Tax Residency
A certificate of residence from the competent authority of the taxpayer’s home country must be submitted.
This certificate must be notarized and translated into Georgian (unless otherwise exempted).
Georgian residents can also request and obtain a residency certificate electronically from the Revenue Service to use abroad.
Correct Forms Must Be Filed
The Order provides mandatory forms to access DTA benefits:
Form №1 – Completed by Georgian tax agents to apply reduced withholding tax (or exemption) at the source for non-residents.
Form №2 – Completed by non-residents to request refund of taxes withheld in Georgia.
Form №3 – Used to obtain a certificate of taxes paid in Georgia by non-residents.
Residency Certificate Form – Used by Georgian residents to confirm their residency status abroad.
Eligible Income Types Must Be Declared with Codes
- Taxpayers must indicate the income category under the Order’s codes:
- Interest (01)
- Dividends (02)
- Capital gain (03)
- Royalties (04)
- Independent personal services (05)
- Employment income (06)
- Other income (07)
Beneficial Ownership Requirement
Treaty benefits (e.g., reduced WHT on dividends, interest, royalties) apply only if the recipient is the beneficial owner of the income.
Agents, intermediaries, or nominal holders are not considered beneficial owners and cannot claim treaty relief.
Language & Translation
Forms must be filled in Georgian or English.
Names and addresses can be in Latin script, but if any document is in another language, it must be accompanied by a notarized Georgian translation.
Deadlines & Procedures
Form №1 (by Georgian tax agent) must be submitted by 1 April of the year following payment.
Non-resident refund requests (Form №2) must be filed within the statute of limitations under the Georgian Tax Code.
The tax authority must respond within 30 calendar days (can extend if justified).
Refunds & Notifications
Refund of overpaid tax is made according to Georgian tax law after verification.
Tax authorities issue written confirmations or certificates (e.g., Form №3 for taxes withheld).
No Apostille Needed
Residency certificates from foreign authorities do not require apostille or legalization.
Conclusion
Georgia’s DTA network offers real relief from double taxation — but only when you establish residency, classify income correctly, satisfy beneficial-ownership, and follow Order №633 procedures. Done right, you minimize leakage, reduce disputes, and improve after-tax returns on cross-border income.
Need help?
LTA can:
- · Review your treaty eligibility and beneficial ownership
- · Prepare and file Forms №1/№2/№3 and residency certificates
- · Assess PE risk and attribution of profits
- · Map your payments to the correct treaty articles and WHT rates
This article is general information, not tax advice. For specific cases, please contact a qualified advisor (book a tax consultation).
