The 2012 worldwide VAT, GST and sales tax guide

242 G EORGIA
Persons that make exempt supplies may or may not be entitled to
claim the input tax deduction (see Section F).
In Georgia a standard rate of VAT at 18% applies to all taxable
supplies of goods and services and imports, unless a specific measure
allows an exemption. The 18% rate also applies to transactions
subject to the reverse-charge mechanism. A VAT rate at 0.54%
applies to temporary imports for each full or partial calendar
month in which the goods are located in the economic territory of
Georgia, but the maximum VAT rate for these goods is 18%.
Goods and services that are exempt from VAT may or may not
give rise to input tax deductions. The following tables list examples
of exempt items for which the taxpayer has the right to
reclaim input tax and those for which the taxpayer does not have
the right to reclaim input tax (these lists are not exhaustive).
Examples of exempt items
with the right to reclaim input tax
Export or re-export of goods for the reporting period in which the
export or re-export is made
Supply of goods or services intended for the official use of foreign
diplomatic missions and equivalent representative offices
as well as for the personal use of the members of such diplomatic
missions and representative offices (including family
members residing with them)
Transportation of exported and transit goods (foreign goods
moving through the economic territory of Georgia) and related
services
Transportation of goods not yet declared into import, warehouse,
temporary import, internal processing or free-zone operations
between points located in Georgia and related services (except
for storage services)
Transportation of goods declared into import, warehouse, temporary
import, internal processing or free-zone operations
before entering the territory of Georgia from the economic
border of Georgia to the destination point and related services
(except for storage services)
Transportation of passengers and cargo and related services, if
the departure or arrival point is located outside Georgia and if
a unified transportation document is issued for such transportation
Import and supply of products to be provided on board for
international flights or international sea passages
Transportation, loading, reloading and storage services provided
for the purpose of sending (returning) empty transport
facilities (including containers and wagons) outside Georgia
Supply of natural gas to thermoelectric power stations
Withdrawal of assets by the state or a local governing body from
an entity’s capital if more than 50% of the shares is owned by the
state or the local governing body
Free supply of goods or services to the state or a local governing
body
Supply of Georgian goods for sale in a free-trade point and sale
of goods and provision of catering services in a duty-free zone
Supply of assets during a corporate reorganization