The purpose of the Virtual Zone Person status and related tax benefits is to attract investments and create an attractive environment for those working in the field of information technology.
- What is a virtual zone person and what does he do ?
A virtual zone entity is a legal entity that carries out information technology activities and has been granted the appropriate status.
Activities in the virtual zone include economic activities carried out by a legal entity that will be directed towards the creation of information technologies on the territory of Georgia. Information technologies are the study, design, development, implementation, support and management of computer information systems, in particular, software products and computer devices, which result in software products.
- How is the status of a virtual zone person assigned ?
A person in a virtual zone is exempt from any special regulation; all that is required is to obtain the appropriate status and not licenses, permits, or other regulatory documents.
To obtain the status, the candidate electronically fills out the application form posted on the official website of the Financial and Analytical Service ( www.fas.ge ), which must be accompanied by a list of information technology projects completed over the past three years (if any).
In addition, it is worth noting that if the status of a virtual zone entity is granted to an entity with the status of an international company as defined by the Tax Code of Georgia, in such a case, the entity’s status as an international company will be revoked, in accordance with the procedure established by law.
- What are the deadlines for granting status?
A person is granted the status of a virtual zone person no later than 10 working days from the date of application for granting the status and the status is granted for life. No later than 2 working days from the date of granting the status, the Financial Analytical Service issues an electronic certificate to the virtual zone person, which can be found on the Financial Analytical Service website ( www.fas.ge ).
- What benefits does a person in a virtual zone enjoy?
According to Article 99, Part 1, Paragraph “J” of the Civil Code, “Profits received from the supply of information technologies created by a legal entity of a virtual zone outside Georgia (profit distribution) shall be exempt from profit tax.”
Tax In legislation Brought Based on the explanations, it can be to say, that Virtual Zone Persons Tax With benefits Useful Right, Only That In case They will have, If They by Informational Technologies Georgia In the territory is being created, While To be delivered Georgia Scope Outside.
For example: If Virtual Zone Person Informational Technologies will deliver Country Inside, This In case Accepted Profit Distribution No Will be subject to Release.
- Deliveries outside Georgia are not subject to value added tax.
- Export duties are not levied on goods taken out of the customs territory of Georgia.
- What causes the cancellation of the granted status?
The Financial Analytical Service cancels the status of a virtual zone person:
- If the status obtained by a person in a virtual zone in accordance with applicable legislation will be used to evade taxes
- Based on the electronic application of a person in the virtual zone, which is sent via the website of the Financial Analytical Service ( fas.ge )
- If a virtual zone person has been granted the status of an international company as defined by the Tax Code of Georgia, in such a case, the status of a virtual zone person shall be deemed to be revoked from the beginning of the month in which the person was granted the status of an international company.
Detailed Information To receive You can Visit relevant Links:
- Law of Georgia No. 4064-RS “On Information Technology Zones” – see link
- “On the procedure and conditions for granting the status of a person in a virtual zone and determining the person granting the status of a person in a virtual zone” Resolution No. 49 of the Government of Georgia – see link
- Methodological instructions on taxation of personal income tax in a virtual zone (Order of the Head of the Revenue Service No. 33544, 29.12.2022) – see link
