Another joint position letter to the Ministry of Finance by EBA and the Association of Georgian Virtual Zone Persons

Negotiations between the Association of Georgian Virtual Zone Persons and the Ministry of Finance continue. Despite a joint position letter that was sent to the Ministry of Finance by the Association of Georgian Virtual Zone Persons and the European Business Association (EBA), which you can view here and the meeting was held, where the main topics were discussed, but there are still many questions left unanswered.

The Association tries its best to achieve the set goal and overcome the problems and challenges that companies with virtual zone status face every day. That is why another joint letter was sent for unanswered issues. The main focus was on topics such as:

Verification of the legislation: in the Tax Code of Georgia, it should be clearly established which technological products were created by whom and where they will have the established benefits for exemption from profit tax.

Determination of clear and precise criteria for tax purposes: Since the Revenue Service agency has changed the issued methodical guidelines several times during the last few months, it is obvious that the approach is not yet clearly established and it creates more opportunities for interpretation of the law, which is unacceptable; We are still waiting for the official response from the agency in order to understand if the pointed issues are clarified and we want them to speed up the process.

Taxes, fines and penalties accrued retrospectively: The legislation framework must establish a guarantee that the person/entity received a clear message from the state in order to manage the correct perception of the norm, to determine which action is prohibited by law and which action may result in legal responsibility.

For companies and individuals with the status of Virtual Zone, the attitude of the government of Georgia is of crucial importance in order to perceive them as partners in doing common work and to further strengthen the IT field throughout the country, which in turn will undoubtedly have a positive impact on the country’s economic growth.

The Association believes that after ten years, retrospectively charged taxes and fines are neither legal nor fair, nor within the framework established by the practice of the tax agency, and they should be eliminated. Therefore, the Association asks the agency to share its position on this issue and what possible options are being considered to resolve this issue.

The Association hopes for an opportunity to schedule the next meeting and expresses readiness to take an active part in developing processes to overcome the challenges fed by the business sector mentioned above through joint dialogue and cooperation.