The great success of the Association – the Business Ombudsman of Georgia gives us support

The activities of the Association and its member companies attract more and more attention.. At the moment, the dispute between the companies with the status of Virtual Zone and the revenue service has gone beyond the bilateral relationship, and the business ombudsman of Georgia got involved in the case, which is a great achievement for the Association. Based on the letter, the ombudsman familiarized himself with the whole situation and this conclusion is completely identical to the opinion of the Association toward the city court, where he visibly explains all the problems and facts that highlight the defects at the legislative level.

It is completely unacceptable for the Ombudsman’s Office to have unformed, unclearly provided information to interested parties, which allows other, independent agencies to interpret the law. The ombudsman openly supports the Association and believes that in order to create a reliable, stable, and transparent situation across the country, first of all for investors, it is necessary to have constant contact between state agencies and interested parties and to make changes in the law in order to establish a correct, targeted, and acceptable tax system.

 In the statement that the Ombudsman addressed to the Tbilisi city court, it is well explained in what cases the companies with virtual status should be fined/taxed. Based on the existing law, the tax system used by the Revenue Service is completely unacceptable because, according to the Tax Code of Georgia, the profit received from the delivery of information technology created by a legal entity of the Virtual Zone outside of Georgia (profit distribution) is exempted from profit tax. The current edition of the law does not impose any other requirements for the purpose of the tax exemption.

In addition, the General Administrative Code of Georgia stipulates that the administrative body is obliged to explain its rights and duties to the interested party, to conduct explanatory work regarding the application of the tax legislation of Georgia, and to publish consultations and explanations using mass media. Unfortunately, the payment authority has not made additional clarifications for the Virtual Zone Persons until 2022.

Based on all of this, in accordance with the position of the Business Ombudsman of Georgia, the above-mentioned circumstances and assessments should be taken into account while considering the complaint of the Virtual Zone Persons.

All virtual zone companies can use the ombudsman’s final letter during court proceedings, which will increase the chances of the case going in their favor. You can contact the association, which will follow you in all these matters, provide you with a letter and other information, and is always ready to support each of its members.