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Everything you need to know about VAT rules in Georgia

Updated 3 months ago | 7 min read time
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We’re required to charge 18% VAT on top of commission fees for some of our partners in Georgia.


What’s in this article


What’s happening?

Following the new VAT legislation in Georgia applicable to electronically supplied services, Booking.com should start charging as of 1 November 2021 18% of VAT on top of the commission we invoice to B2C partners in Georgia. The law does not apply for B2B partners.

Note that legislation was issued in Georgia to postpone this obligation as according to the previous version of the law VAT would have to be charged already in August invoices for July services.

We will need to request the Partners if they are a private individual, a legal entity or an individual entrepreneur and, depending on their answer, we will need to be provided with their tax identification number and/or a copy of the extract from the public registry or the certificate issued by the revenue service. This will help us to clarify Partners as B2C or B2B in order to charge the VAT accordingly.


What do I need to do?

Please provide us with your tax identification number and/or a copy of the extract from the public registry or the certificate issued by the revenue service. Here’s how to provide us with this information:

  1. Log in to the extranet
  2. Click on Finance and then click on VAT Details
  3. Update your VAT information in the required fields

If we need to charge you VAT, we’ll start doing this on your November 2021 invoice. For more information on tax legislation, please contact the local tax authorities or your tax advisor.


FAQs

Q1: What will change for the Partner?

Some of our Partners in Georgia will start receiving commission invoices from Booking.com BV on which 18% VAT is charged on top of our commission. The total invoice amount (commission + VAT) should be paid to Booking.com. In order to determine this, the Partners will have to inform us upfront if they are a private individual, a legal entity or an individual entrepreneur. If they confirm to be a legal entity or an individual entrepreneur they will be required to provide us with some additional information.

Q2: Does it matter whether the partner is registered for VAT/Tax? 

Partners will be charged depending if they qualify as a private individual, a legal entity or an individual entrepreneur.

We will charge VAT: a) to all Partners that confirm to be a private individual without an entrepreneurial status and b) to Partners that confirm to be a legal entity or an individual entrepreneur but don’t provide the information requested.

We will not charge VAT: a) to Partners that confirm to be a legal entity and provide us with their tax identification number; and b) to Partners that confirm to be an individual entrepreneur and provide us with their tax identification number and copy of the extract from the public registry or the certificate issued by the revenue service.

Q3: As of when will Booking.com BV start charging VAT in Georgia? 

It is expected that Booking.com will start charging VAT as of November 2021 invoicing.

Q4: Is the VAT charge going to be an extra cost for the partners in Georgia

B2C Partners should not be able to deduct the input VAT. Concerning B2B Partners, the reverse charge mechanism applies and it should be possible to deduct the input VAT. The total invoice (commissions plus VAT) needs to be paid in full. Please advise the Partners to contact their tax adviser in case of questions about their VAT position.

Q5: If Partners have any tax and/or legislation related questions who should they be advised to get assistance from? 

Partners should be directed to their local tax adviser or authority, as we do not provide advice on this.

Q6: Is Booking.com now paying tax in Georgia? 

Following the new VAT legislation in Georgia, Booking.com BV needs to register for VAT in Georgia as of October 2021. The VAT charged and collected from the Partners will be paid by Booking.com BV to the Government of Georgia. This VAT registration of Booking.com BV is apart from the fact that Booking.com BV is a Dutch established and incorporated company and therefore obliged to pay income tax in the Netherlands. 

Q7: What if a partner in Georgia does not provide us with the information required? 

In this case Partners in Georgia can expect to receive an invoice from Booking.com with 18% VAT on top of the commission fee. The total invoice amount (commission + VAT) should be paid to Booking.com. 

Q8: What kind of information is required by the partners? 

From our Partners we will ask: 

  1. Whether they are private individuals, legal entities or individual entrepreneurs.
  2. If they reply to be a legal entity they will have to provide us with their tax identification number. If they reply to be an individual entrepreneur they will have to provide us with i) their tax identification number and ii) copy of the extract from the public registry or the certificate issued by the revenue service.

Q9: Is there any Governmental portal where Partners can find more information about this VAT legislation? 

Partners can visit this page: https://www.rs.ge/home

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