Your Georgian company pays 5% on a dividend. Your old country then wants its own slice of the same money, and neither tax office will tell you who has the better claim. Georgia's double taxation treaties settle that question, but only if somebody files the right form with the right certificate attached. Here is what the network covers, what it leaves out, and how relief is actually claimed on the Georgian side.
What a treaty actually decides
Two countries can both have a valid claim on the same income under their own domestic law. A treaty does not cancel either claim. It allocates them.
Article 2(7) of the Tax Code of Georgia says any international tax-related treaty ratified by the Parliament of Georgia and in force prevails over the Code. Where the Code and a treaty disagree, the treaty wins.
Beyond that, a treaty does four jobs. It breaks a tie when both countries call you a resident, on a fixed ladder: permanent home, centre of vital interests, habitual abode, nationality, then negotiation between the two tax authorities. It caps what the source country may withhold. It obliges the residence country to relieve the rest by credit or exemption. And it opens a mutual agreement procedure when the first three fail.
Georgia's treaty network, and the holes in it
The Ministry of Finance publishes the authoritative list. Its double taxation treaty page states that 58 treaties on the avoidance of double taxation and the prevention of fiscal evasion are currently in force, and that the texts are based on the OECD Model Tax Convention.
Coverage is deep across Europe, the former Soviet states, the Gulf and most of Asia. The gaps matter more, because they are exactly where the expat population comes from.
| Your other country | Treaty with Georgia | What that means for you |
|---|---|---|
| United Kingdom | Yes, in force since 2005, later modified by the MLI | Tie-breaker plus reduced source taxation |
| Germany, France, Netherlands and the rest of the EU | Yes | Full protection, article by article |
| UAE, Qatar, Saudi Arabia, Bahrain, Kuwait | Yes | Useful for Gulf-resident owners of Georgian entities |
| United States | No | Domestic relief such as the foreign tax credit, not a treaty |
| Canada | No | No tie-breaker, no capped withholding, no mutual agreement procedure |
| Australia | No | Same position as Canada |
| Russia | No treaty in force | Domestic law on both sides decides everything |
Check the list before you plan around it: a treaty that has been signed is not yet a treaty that applies.
The Georgian side is usually cheap already
This is the part most guides get backwards. Georgia's own withholding rates are low, so a treaty ceiling often changes nothing on the Georgian end. The value sits on the other side of the border.
| Payment to a non-resident | Georgian domestic rate | Tax Code basis |
|---|---|---|
| Dividends | 5% | Article 130(1) |
| Interest | 5% | Article 131(1) |
| Royalties | 5% | Article 134(1)(b¹) |
| International transport and telecoms services | 10% | Article 134(1)(c) |
| Oil and gas subcontractors | 4% | Article 134(1)(d) |
| Other Georgian source income, including most service fees | 10% | Article 134(1)(e) |
| Salary | 20% | Article 134(1)(f) with Article 81 |
| Interest, royalties or other amounts paid to a person in a preferential tax jurisdiction | 15% | Article 134(1¹) |
Rates in the Tax Code move. Confirm the current figure before you price a contract around it.
If a treaty allows the source state up to 10% on dividends and Georgia charges 5%, you pay 5%. A treaty sets a ceiling on the domestic rate. It never raises it, and it never invents a tax the Code does not impose.
Where a treaty earns its keep for a Georgian company is the 10% on other Georgian source income. Pay a foreign contractor and you are a tax agent with a withholding obligation. The right business profits article removes it, provided the contractor has no permanent establishment here and the paperwork exists before you pay.
The four forms that actually claim the relief
Article 125 of the Tax Code hands the procedure to the Minister of Finance, and the operative rules sit in Decree N633 of 28 December 2011, published in English by the Revenue Service. It approves four numbered forms, and nearly every treaty problem we see traces back to one never being filed.
| Form | Who files it | What it does | Timing |
|---|---|---|---|
| N1 | The Georgian payer, as tax agent | Reports the exemption or reduced rate applied at source | By 1 April of the following year |
| N2 | The over-withheld non-resident | Declares tax withheld in Georgia and claims repayment | Within the Tax Code time limits |
| N3 | The non-resident recipient | Requests a certificate of taxes paid in Georgia, for use abroad | On request |
| N4 | The Georgian resident | Applies for the Certificate of Residence | On request, per tax year |
Three details matter. The tax authority must decide in writing within 30 calendar days, and where your submission contains errors it sets a correction period of up to another 30. Forms may be completed in Georgian or English; a third language needs a notarised Georgian translation. Foreign currency converts to lari at the National Bank of Georgia rate on the day of payment.
The rules state that certificates of residence issued by foreign competent authorities do not require an apostille or legalisation. They do still need an authenticated Georgian translation when attached to Form N1 or Form N2, so budget translator time, not embassy time.
The certificate is the key that turns the lock
A treaty is useless without proof of which country you are resident in. Form N4 is how a Georgian resident gets that proof: the Revenue Service certifies residence for a stated period. It is issued per tax year, so three years needs three certificates.
Getting one presumes you qualify, which is a separate fight. The day count, the exclusions and the route for high net worth applicants are set out in our guide to Georgian tax residency rules.
Relief runs the other way too. A non-resident claiming a reduced Georgian rate hands your company a certificate from their own authority, and you attach it to Form N1. No certificate, no reduced rate, and the tax agent carries the exposure.
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See the ranked list
Four places treaty relief breaks
The distributed profit tax is not always creditable abroad
Georgia taxes corporate profit at 15% under Article 98, but only on distribution rather than on accrual. Foreign shareholders assume that tax follows them home as a credit. Often it does not.
Many Georgian treaties follow the OECD Model wording, which lets the residence state credit tax on the dividend while expressly excluding tax payable on the profits out of which that dividend is paid. The UK agreement is drafted exactly that way. Read literally, a shareholder credits the 5% withholding and not the 15% underneath it. Model this before you declare a large distribution.
Many treaties now carry an anti-abuse test
Georgia is a party to the OECD multilateral instrument, which rewrites covered treaties without renegotiating them one by one. The UK case is documented on the government's own Georgia tax treaties page, where the modifications took effect from 1 January 2020 for taxes withheld at source.
One of those modifications is a principal purpose test. A benefit is denied if obtaining it was one of the principal purposes of the arrangement, unless granting it fits the object and purpose of the treaty. Structures built only to reach a rate no longer survive contact with that sentence.
Treaties cover income and capital, not VAT
The taxes covered article lists profit tax, income tax and the property taxes. VAT sits outside it. No treaty and no residency certificate will spare you a Georgian VAT registration or a reverse charge on imported services.
A treaty does not undo a permanent establishment
If your foreign company runs a fixed place of business here, the treaty confirms that Georgia may tax the profits attributable to it. That is the treaty working as designed, not a loophole. Structure the entity properly at the start, which is a conversation for company registration firms in Tbilisi rather than a correction two years later.
Where this leaves the common cases
A freelancer on 1% small business status is taxed under the income tax part of the Tax Code, so the charge sits inside the scope of a typical treaty. Whether a foreign authority will credit a turnover-based tax against its own income tax is a different question, worth a written answer before you rely on it.
An LLC owner distributing profit should read the dividend article and the elimination-of-double-taxation article together. Our breakdown of corporate and dividend tax covers the Georgian half.
A company paying foreign suppliers needs Form N1 discipline in the month-end routine, which is ordinary work for accountants in Tbilisi and painful to reconstruct in March. Where the position is arguable, get a written opinion from tax advisors in Tbilisi. And if your plan depends on staying long enough to qualify, run the permit question in parallel with immigration lawyers in Tbilisi.
Key takeaways
- Georgia has 58 double taxation treaties in force per the Ministry of Finance, drafted on the OECD Model.
- Article 2(7) of the Tax Code puts a ratified treaty above the Code, so the treaty rate beats the domestic rate.
- There is no treaty with the United States, Canada, Australia or Russia.
- Georgian withholding is already low, so treaties matter more for what the other country must give you than for what Georgia charges.
- Relief runs on four forms from Decree N633: N1 and N4 on the Georgian side, N2 and N3 on the non-resident side.
- Foreign residence certificates need no apostille, but do need an authenticated Georgian translation.
- The 15% profit tax on distribution may not be creditable at shareholder level abroad. Check your specific treaty.
FAQ
What is a double taxation treaty?
It is a bilateral agreement that allocates taxing rights over the same income between two countries. It does not abolish tax: it decides which country taxes first, caps what the source country may take, and requires the residence country to relieve the rest. Georgia's treaties follow the OECD Model Tax Convention.
How many double taxation treaties does Georgia have?
58 are currently in force, according to the Ministry of Finance. The network covers every EU member state, the UK, Turkey, China, Hong Kong, Japan, Singapore, India and the main Gulf states. More are signed or under negotiation at any given time, so check the ministry list rather than a blog post.
Does Georgia have a tax treaty with the United States?
No. The United States does not appear on the Ministry of Finance list of treaties in force. US taxpayers here rely on domestic relief such as the foreign tax credit instead of a treaty tie-breaker, and there is no mutual agreement procedure to fall back on.
Do I need a tax residency certificate to claim treaty benefits?
Yes, in practice. A foreign payer or tax authority applies a treaty rate only against proof of Georgian residence for the relevant year. Georgian residents apply on Form N4 and the Revenue Service certifies residence for a stated period. Certificates are per tax year, so a multi-year claim needs several.
Does a treaty reduce Georgia's 5% dividend withholding tax?
Sometimes, and often it changes nothing. Article 130(1) sets the domestic rate at 5%, and many treaty ceilings sit at or above that, in which case the domestic rate stands. A few treaties, including the UK agreement, exempt qualifying dividends in the source state entirely.
Who claims the relief, me or the company paying me?
For payments out of Georgia the Georgian payer is the tax agent, applies the reduced rate at source, and reports it on Form N1 by 1 April of the following year. The non-resident's job is to supply a valid certificate of residence in time. If the payer withholds in full anyway, the non-resident chases a refund.
Can I recover tax that was over-withheld in Georgia?
Yes. The non-resident files Form N2, declaring the tax withheld in Georgia and claiming repayment, with a certificate of residence attached. The tax authority issues a statement confirming the excess, and repayment follows the ordinary Tax Code refund rules. It is slower than getting the rate right at source.
Does 1% small business status get treaty protection?
The 1% charge under Article 90 sits inside the income tax part of the Tax Code, so it falls within a typical treaty's taxes covered article. Whether a foreign authority will actually credit a turnover-based tax against its own income tax is a separate matter and varies by country. Get a written view first.
What happens if both countries treat me as a resident?
The treaty tie-breaker decides, in order: permanent home, centre of vital interests, habitual abode, nationality, then agreement between the two competent authorities. Only one country wins for treaty purposes. Without a treaty there is no tie-breaker, and you can face two full domestic claims on the same income.
Does my foreign residence certificate need an apostille?
No. The rules approved by Decree N633 state that certificates issued by foreign competent authorities need no apostille or legalisation. They do need an authenticated Georgian translation when submitted with Form N1 or Form N2. Requirements change, so confirm the current position before couriering documents.