The dispute between the RS and VZ companies continues and Association starts 2023 with new forces

2023 begins with new forces; the Association of Georgian Virtual Zone Persons continues its work, and more and more independent experts express their positions and fully share the vision of the Association.  

It should be noted that the Ministry of Finance has not changed its approach until now. The Revenue Department is continuing a new wave of audits and fines with inconsistent approaches. And if some companies have had their fines reduced, the general approach to that fines system has remained unchanged, and companies are additionally taxed with income tax, which again points to the problem of inaccuracy in the legislation. The stages of the audit, inspection, and fines seem to be still going on. The companies still object to the approach of the tax authority and continue the legal dispute.

Few weeks ago, one more company was fined hundreds of thousands Lari based on the same criteria that are the subject of the current protest and dispute because the exact definition of this criterion is not specified anywhere.

On this topic, the following resonant story came out on Business Formula, where the position of the business ombudsman regarding the disputed issue became known. He shares the position of the business on all the main contentious issues: there should be no possibility of interpretation of legislation. Businesses should know the exact guidelines to follow in order to avoid being penalized. It is a fact that the distribution of fines and sanctions for the past period violates the framework of justice.

Despite the fact that the companies’ requests are legal and well-founded, the decision-making by the regulatory body is delayed, companies suffer losses, the image and trust of the state itself are damaged, and many foreign companies refuse the dubious prospect. The main thing is a clarification of the law because businesses and investors are primarily guided by it.

The business sector hopes that the court will share its arguments and the position of the business ombudsman and write off the taxes and sanctions imposed on them in the past period.

P.S. As a result of many years activities of the Association, the Tax Office finally released another methodical reference we received just this morning. We are studying it, you can also read it here. After a thorough analysis, the Association will provide its comments and position on this document. We want to emphasize that the priority of requests of the Association and companies with Virtual Zone status still remains to change the law rather than issuing contradictory guidelines.