Amendment to the Tax Code

Tbilisi. The Civil Society Institute has lobbied the amendment to the Tax Code. To improve the mechanisms of taxation of not-for-profit organizations, the Institute has provided the Ministry of Finances of Georgia with several draft bills on amendments and supplements to the Tax Code. One of them concerned the problem related to the taxation of property of small value (books, seminar materials, etc.) given gratuitously to physical persons by the civil society organizations at the organized events (conferences, seminars, etc.), and withholding the income tax in accordance with their value.
The Ministry of Finances of Georgia has offered the compromising version of problem solution in respect of this issue. This offer was formulated as a draft law and in May 2012 the Parliament of Georgia has debated it and finally amended Sub-Paragraph ‘l’ of Paragraph 1 of Article 154 of the Tax Code. Pursuant to the amendment, a tax agent (including a not-for-profit legal entity) shall be obligated to withhold an income tax only when it gratuitously transfers property to a physical person who does not have a tax-payer’s certificate, if the market value of the property exceeds 1,000 GEL.

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