The recent amendments to the “Tax Code of Georgia” represent a large-scale legislative and administrative reform aimed at modernizing the country’s tax system, increasing transparency, and aligning it with international standards. These changes were introduced and implemented gradually through the official channels of the Revenue Service of Georgia and include both modifications to the calculation rules of specific taxes and improvements in administrative mechanisms.
Changes in Excise Tax on Vehicles
One of the significant changes concerns the excise tax on passenger vehicles, which came into force on April 2, 2026. Under the new regulation, the excise rate is no longer determined uniformly; instead, it depends on the vehicle’s age, engine capacity, and environmental characteristics. This change serves environmental objectives by encouraging the use of newer and more eco-friendly vehicles. At the same time, older vehicles with higher emissions are subject to higher taxation, acting as an economic lever to reduce environmental pollution.
Legislative Amendments Effective from January 1, 2026
As of January 1, 2026, a package of legislative amendments adopted at the end of 2025 also entered into force, affecting various articles of the “Tax Code”0. The main goal of these changes was to improve tax administration, ensure legal clarity, and eliminate practical shortcomings. The updated provisions regulate taxpayers obligations in greater detail, reduce room for interpretation, and strengthen control mechanisms.
Particular importance is given to the regulation of international controlled transactions (Transfer Pricing). Starting from 2026, a new annex has been added to the corporate income tax return, requiring companies to provide detailed information on transactions conducted with related parties. This change aims to prevent artificial profit shifting to low-tax jurisdictions and helps protect the tax base. It is especially important for companies that are part of multinational groups or actively operate in international markets.
Reforms in Small and Micro Business Tax Regimes
The changes also affected the tax regimes for small and micro businesses. The conditions for granting, maintaining, and revoking status have been updated, and reporting and administrative rules have been refined. These adjustments aim to ensure more accurate classification of businesses and to create an environment where special tax regimes are applied appropriately rather than abused. As a result, oversight of this category of taxpayers has increased, while certain tax benefits for them have been retained.
Another important change involves stricter registration obligations. Companies registered before 2022 were required to update their data, including information on their actual activities, address, and management. Entities that failed to comply with this requirement have faced restrictions on carrying out tax operations since April 2026. This measure is aimed at improving the accuracy of the business registry and identifying inactive or nominal companies.
In addition, the instructions on tax administration have been updated, leading to significant practical changes. Declaration forms, deadlines, and methods of submitting information have been revised, and tax control mechanisms have been strengthened. These changes directly affect both accounting practices and daily business operations, as they increase requirements for accuracy and timeliness.
Amendment on Gambling Taxation
The relatively recent 2024 amendment concerning gambling has become a significant change in the tax code. Unfortunately or fortunately, depending on one’s perspective, the tax rate on a gambler’s winnings has been increased to 15%. It is noteworthy that this rate previously stood at 10%, making the adjustment a substantial shift within the broader framework of tax reforms.
This reform reflects the government’s effort to strengthen fiscal revenues and exert greater regulatory control over the gambling sector, which has been expanding rapidly in recent years. By raising the tax rate, policymakers aim not only to increase budgetary income but also to discourage excessive gambling by reducing the net returns for players. At the same time, the change aligns the taxation system more closely with international practices, where gambling winnings are often subject to higher tax rates.
However, the reform may have mixed implications. On one hand, it can contribute positively to public finances and promote more responsible gambling behavior. On the other hand, higher taxation could push some players toward unregulated or offshore platforms, potentially undermining the intended regulatory benefits.
Summary
Overall, these legislative amendments demonstrate that Georgia’s tax system is evolving toward a more structured, transparent framework aligned with international standards. Particular emphasis is placed on environmental policy, financial flow control, and protection of the tax base. As a result, both the effectiveness of state oversight and the fairness of the system are increasing, which, in the long run, contributes to economic stability and an improved business environment.
