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The Revenue Service Discussing the Business’ Initiatives Related to Tax Legislation

11 Nov '11

The BAG members and representatives of the Revenue Service with the leadership of Jaba Ebanoidze held another regular meeting at Sheraton Metekhi Palace Hotel on November 11 to discuss the initiatives made by the business regarding the tax legislation. Within the framework of close cooperation, similar meetings between the BAG and RS have already become systematic.
Out of almost fifty proposals initiated by the Association member companies, eight were put on the agenda of the meeting for discussion. The RS appreciated majority of the businessmen's suggestions and relevant amendments have been planned (exemption from profit tax of the benefit due to suretyship between Georgian resident and interrelated legal entities; VAT adjustment when using own production facilities as fixed assets; thin capitalization). Some of the proposals, as promised by the RS will be incorporated in the relevant instructions or methodological directives to be binding for tax authorities.

The following is the list of issues discussed at Friday's meeting:

Exemption from profit tax of the benefit due to suretyship between Georgian resident and interrelated legal entities;
Legislative issues of taxation of warranty service/supply of goods;
VAT adjustment when using own production facilities as fixed assets;
Use of bonus cards in the services sector;
Income derived from interest and withheld at source in Georgia and abroad to be credited as a profit tax;
Problem arising due to lack of relevant document certifying the payment during importation of goods;
Thin capitalization;
Regulation of using the market price in a transaction made between interrelated persons.
The companies heard the RS position and future visions regarding the above issues in the light of taxation allowing the business to rightly use the relevant legal norms and to avoid misunderstandings. As for the remaining forty issues, they are subject of continued intensive work and decisions will be provided to the businessmen already at the next meetings.