The Association of Georgian Virtual Zone Persons, whose primary goal is to protect the interests of the members of the Association and to provide transparency in the regulation of their activities, has been attempting to protect the interests of companies with Virtual Zone status for a long time.
For this, in June the Association took significant steps, such as meeting with the Business Ombudsman office and discussing the critical situation concerning companies with Virtual Zone status. At the meeting, the Association raised three major issues: the cancellation of fines; the need for a legislative initiative so that the law does not remain unclear; and establishing clear criteria for IT companies, which the Business Ombudsman fully supported, and the ombudsman’s office is ready to appeal to the relevant Governmental bodies, investigate the interests of the members of the Association and issued recommendations. These days, the Association is waiting for the official position of the Business Ombudsman, which we will share with you.
The topic of taxation problems was also discussed on the program Business Formula, where the chairman of the Association stated that over a thousand legal companies have registered with the status of the Virtual Zone in Georgia. According to tax practice, companies are not required to have employees in Georgia or to provide services directly from the territory of Georgia. Nevertheless, businesses are fined for not having Georgian employees or operating from Georgia. 70% of companies have a dispute with the Revenue Service and the amount of fines exceeds 4-5 million GEL.
Business Formula dedicated another program to this issue, where they talked about the government’s strategic plan to become the digital hub of the region, which will help attract large companies to the country. Shorena Kopaleishvili emphasized the importance of communication between the state and business. Businesses must believe that they are important to the state. The state and the revenue service must create an environment in which businesses can operate and grow.
On June 21, 2022, the European Business Association (EBA), with the support of the European Union organized the “EU-Georgia Business Forum 2022” for the very first time where the Chairman of the Association, Shorena Kopaleishvili, took an opportunity to communicate with representatives of Governmental and Business Organizations, once again pointing out the main important issues for VZP companies.
The unfair actions of the Revenue Service against the companies with the status of a Virtual Zone were covered in the program “Forbes Week”, where the chairman of the Association of Georgian Virtual Zone Persons, Shorena Kopaleishvili, was invited. According to her, they are planning to organize additional meetings with all responsible and decision-making authorities. The Association is actively cooperating with various agencies and associations to address this issue. The main goal of the Association of Georgian Virtual Zone Persons is to establish a dialogue with the state and achieve the abolition of fines accrued in the past.