By Gela Barshovi, tax adviser and managing partner of TPsolution, Tbilisi, Georgia
The Republic of Georgia’s Ministry of Finance on 23 July published the synthesized text of tax treaties with five countries, as amended by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
The five tax treaties published concern Iceland, Ireland, Finland, Luxembourg, and Slovenia. The MLI entered into force for Georgia on 1 July 2019. Notably, Georgia signed the MLI on 7 June 2019.
Georgia has signed double taxation agreements with 56 countries, 34 of which are the subject of amendments via the MLI. The changes to those 34 treaties will take place gradually.
The Georgian Ministry of Finance has published the amended versions of several treaties on its official website, with the note “DTA, MLI synthesized text.”
To date, the MLI has changed eight Georgia double taxation agreements. The other amended agreements are with India, Serbia, and UK. 26 more will be changed soon.
Notably, Georgia accepted only the OECD/G20 base erosion profit shifting (BEPS) plan minimum standards in the MLI. The most frequently applied change to Georgia bilateral tax treaties is to add a principal purpose test to the treaty as Georgia does not apply the mutual agreement procedure in practice yet.
Gela Barshovi
Gela Barshovi is Tax Advisor and Managing Partner at TPsolutions, Tbilisi, Georgia.
Gela was Chief Tax Auditor and Group Leader of the Georgian Tax Administration's international tax division from 2010--2017. He represented Georgia as a member of Working Party 6 during the OECD/G20 BEPS project negotiations. He has taught taxation at different academies since 2015.
Gela also worked as a transfer pricing consultant with BDO in Vienna, Austria, and as a senior associate in the tax group of Comparex AG, in Leipzig, Germany.
He holds a master’s degree in international tax law from Vienna University of Economics and Business (WU).
Latest posts by Gela Barshovi (see all)
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- Georgia publishes amended text of tax treaties with Iceland, Ireland, Finland, Luxembourg, Slovenia - August 10, 2020
- Georgia transfer pricing: what multinational groups need to know - March 5, 2020
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