Georgia introduced a unilateral APA regime in 2013, but the application of the regime remained suspended in the absence of implementing executive regulations. The implementing regulations were eventually issued in a ministerial Decree No. 45 of 2 March 2021. The Georgian tax authorities are expected to start accepting APA applications once the APA fee schedule is released.
Under the law, taxpayers can apply for an APA in order to determine in advance the tax treatment of one or more transactions. In principle, applications are possible only with respect to transactions exceeding GEL 50 million in value. However, the 2021 Decree removed this threshold, and APA applications are now possible regardless of the value of the relevant transaction(s). The application for an APA must be filed before undertaking the relevant transaction(s), and, once granted, an APA is generally valid for a period of 3 years.
The 2021 Decree (effective from 5 March 2021) introduced the possibility for the taxpayer to request a pre-filing meeting with the tax authorities. The pre-filing meeting can be used by the taxpayer to gauge the initial reaction of the tax authorities and assess the likelihood of success of a formal application. The same Decree clarified the procedural APA aspects and introduced 4 different sample forms as follows:
- Pre-filing meeting request form;
- APA application form;
- APA agreement form (to be issued by the tax authorities and signed by taxpayer and tax authorities); and
- Form for periodic reporting on APA implementation.
The law does not preclude the possibility of concluding bilateral or multilateral APAs, but these areas are not yet covered by executive regulations.
The annual APA compliance report requirements are due by 1 April following each year the APA applies and the APA application must be submitted in the Georgian language.
Most of the tax treaties to which Georgia is a party provide for a MAP. Under the procedure, a taxpayer may request the opening of a MAP to resolve cases of (double) taxation which are not consistent with the provisions of the relevant double tax convention. There is to date, however, little experience with the MAP process in Georgia (the OECD MAP statistics show zero MAP inventory for Georgia in 2019). Note that a limited number of Georgia’s tax treaties (e.g., the treaties with Italy and the Netherlands) provide for the possibility of resorting to arbitration in case the dispute is not resolved through the MAP process.