Is my income from abroad taxed in Georgia: what to do under Georgian law

What to do

1. Territorial principle: the income of a resident individual that is not from a Georgian source is exempt from income tax (Tax Code of Georgia, Art. 82). A non-resident pays only on income from a Georgian source (Art. 79). A resident is someone present in Georgia for 183 or more days in any continuous 12-month period ending in the tax year (Art. 34). For foreign passive income the result is the same: it is not taxed in Georgia.
2. Source by type of income: dividends have a Georgian source only if paid by a resident legal entity (Art. 104); interest, if the payer is a Georgian resident (Art. 104); pension or scholarship, if paid by a Georgian resident (Art. 104); rent of movable property, if it is used in Georgia (Art. 104). Rent of a flat abroad, foreign dividends, interest and pensions do not have a Georgian source.
3. Boundary: employment and services performed in Georgia are Georgian-source income. A resident's services to a foreign client are also a Georgian source, except services provided through a permanent establishment abroad (Art. 104). The place where the money is received is irrelevant (Art. 104). Work and freelancing physically performed from Georgia are taxable, even if the payer is a foreigner.
4. If the source is Georgian, the rate is 20%, unless otherwise provided (rent of residential property without deductions: 5%) (Art. 81). The declaration is due by 1 April of the following year if the income was not taxed at source (Art. 153).
5. Tax in the source country and double taxation treaties are a separate question. Exemption in Georgia does not cancel foreign tax.
6. Where to apply: Revenue Service (rs.ge) for the declaration, clarifications and a certificate of residence.
7. Evidence: foreign lease agreements, broker statements, statements from a foreign bank or pension authority, a count of days spent in Georgia.
8. Traps: assuming that a transfer to a Georgian account makes the income Georgian; treating salary or freelance work performed from Georgia as 'foreign income'; confusing the exemption in Georgia with tax in the source country.

Be sure to check

• a resident's income not from a Georgian source is exempt (territorial principle)
• what counts as a Georgian source by type of income: dividends, interest, pension, real estate
• work or services performed from Georgia are Georgian-source income; where the money is received does not matter
• residency: 183 days in any 12-month period
• tax in the source country and double taxation treaties: separately