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Cryptocurrency and hash taxes in Georgia, Tbilisi

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Cryptocurrency and hash taxes in Georgia, Tbilisi 2022

Cryptocurrency and hash taxes in Georgia, Tbilisi: Although the National Bank of Georgia does not consider bitcoin and other cryptocurrencies legal payment instruments, yet it does not control operations with virtual money. The loyalty of the Georgian authorities to crypto is also evidenced by the fact that on June 28, 2019, the Ministry of Finance of Georgia even provided an explanation of the taxation of cryptocurrency market participants.

The main points of the normative document are as follows:

personal income from cryptocurrency transactions is exempt from income tax;
the sale and exchange of cryptocurrency into national or foreign currency is exempt from VAT;
sale of the hash abroad is not subject to VAT;
hash export entitles you to input VAT;

Hash operations between residents in Georgia and the purchase of a hash by a resident from a non-resident are subject to VAT.

The last paragraph requires mining companies that are registered in Georgia to pay VAT (18%), which leads to added costs and detriments the attractiveness of the jurisdiction. However, all other conditions increase the attractiveness of the sale and crypto exchange and of course, we should not forget about the Free Industrial Zones, where legal entities, including mining companies, are exempted from paying VAT on export earnings.

Selling currency by legal entities (unlike natural person, if he is resident of Georgia) is subject to taxation (15% corporate income tax). If the entity decides to distribute the profit (dividend) to shareholders, it pays 5% (withholding tax) above 15% (CIT) of corporate tax. However, if it will be reinvested, then they don’t pay anything.

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