{"id":1023,"date":"2022-11-28T12:17:52","date_gmt":"2022-11-28T08:17:52","guid":{"rendered":"https:\/\/ants.ge\/?p=1023"},"modified":"2024-09-06T02:08:38","modified_gmt":"2024-09-05T22:08:38","slug":"non-qualified-vat-payer-status","status":"publish","type":"post","link":"https:\/\/ants.ge\/en\/non-qualified-vat-payer-status\/","title":{"rendered":"Non-qualified VAT payer status"},"content":{"rendered":"<p>Our client companies often ask questions regarding the <a href=\"https:\/\/ants.ge\/en\/services\/tax-advisory\/\">non-qualified VAT payer<\/a> status in accordance with Georgian tax code. In this article we will discuss the details of this status and will explain the reasons for which it is important for companies operating in Georgia to know the basic aspects of this topic.<\/p>\n<p>Our company provides all necessary <a href=\"https:\/\/ants.ge\/en\/services\/accounting\/\">accounting services<\/a> related to VAT and other taxes in Georgia.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Why is it important to know the basics of this topic?<\/strong><\/p>\n<p>If your company purchases products or services from non-qualified VAT payers, then you will not be able to recover input VAT from such transactions. This could lead to significant financial losses.<\/p>\n<p>For example, if your company purchased 118,000 GEL inventory and in accordance with contract with the supplier, the price includes VAT, in this case if your company itself is registered as a VAT payer, it will be able to recover the input VAT of 18,000 GEL. Therefore, net cash outflow for purchase of inventory equals 100,000 GEL, since company pays 118,000 GEL to the supplier and then recovers 18,000 GEL from the state. However, starting from 2021, Revenue Service of Georgia introduced the term \u201cnon-qualified VAT payer\u201d. If company is classified as a non-qualified VAT payer, you will not be able to recover VAT on products and services purchased from such company. In our example, instead of net cash outflow of 100,000 GEL, you would have an outflow of 118,000 GEL and you would have lost 18,000 GEL in non-refundable taxes.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Which companies are classified as non-qualified VAT payers?<\/strong><\/p>\n<p><a href=\"https:\/\/ants.ge\/en\/services\/tax-advisory\/\">Non-qualified VAT payer<\/a> status is automatically assigned to companies newly registered as VAT payers. Besides, a company is assigned non-qualified VAT payer status if it did not have any operations on its tax card for the last consecutive 12 months period.<\/p>\n<p>Abovementioned change was introduced by the state to prevent fictitious companies from registering solely for the purpose of obtaining tax benefits for their related parties. Often such companies did not have any business substance and were established to issue tax invoices to their related companies to entitle them to fraudulent VAT input refunds.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>How can we learn whether our supplier has non-qualified VAT payer status?<\/strong><\/p>\n<p>Considering the above discussed, it is only natural that many companies are interested in checking their potential supplier\u2019s VAT payer status prior to signing a contract with them. It is especially important to check the status before committing to any large transactions due to proportionally higher associated risk of financial loss.<\/p>\n<p>You can easily check qualified\/<a href=\"https:\/\/ants.ge\/en\/services\/tax-advisory\/\">non-qualified VAT payer<\/a> status on Revenue Services\u2019 webpage. For this, you just need to know or obtain tax identification code of your supplier and check this code on Revenue Service\u2019s online portal. The status can be checked on the following online address: <a href=\"https:\/\/rs.ge\/CheckUnqualifiedStatus\">https:\/\/rs.ge\/CheckUnqualifiedStatus<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our client companies often ask questions regarding the non-qualified VAT payer status in accordance with Georgian tax code. In this article we will discuss the details of this status and will explain the reasons for which it is important for companies operating in Georgia to know the basic aspects of this topic. Our company provides [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1609,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1023","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Non-qualified VAT payer status - Ants.ge<\/title>\n<meta name=\"description\" content=\"Learn how non-qualified VAT payer status impacts your business in Georgia. 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