Double taxation: one income, two taxing states
Double taxation is the taxation of the same income or gain by two states for the same period; for a foreign owner of a Georgian flat, it usually means Georgia taxing the rent or sale gain because the flat is located here, and the owner's home country taxing the same amount again as part of worldwide income.
Georgia's answer is its treaties, which the Tax Code calls ორმაგი დაბეგვრის თავიდან აცილების შესახებ საერთაშორისო შეთანხმებები, international agreements on the avoidance of double taxation (Art. 125). Article 2(1) of the Tax Code of Georgia makes them part of tax legislation, and Article 2(7) gives a ratified treaty in force "superior legal force" over the Code (our translation). The Ministry of Finance lists 58 in force.
Treaties target juridical double taxation, one person taxed twice on one income, not the economic kind. In Georgia the problem runs mostly one way: a resident individual is exempt on income without a Georgian source (Art. 82(1)(u), letter ფ in the Georgian text). For a foreigner who owns a flat here, the second charge comes from the home country, and the treaty decides how that country must soften it.
Source and residence: why a Georgian flat can be taxed twice
The source state taxes income arising on its territory; the residence state taxes its residents on income from anywhere. Georgia's source rules are in Tax Code Art. 104(1), and Art. 104(2) adds that where the money is received does not matter.
| Income | Source rule | Georgian tax on an individual | Treaty article |
|---|---|---|---|
| Rent from a flat | Art. 104(1)(l), immovable property in Georgia used for economic activity (see below) | 5%, Art. 81(2) | Art. 6 |
| Gain on selling it | Art. 104(1)(b), supply of goods on Georgian territory | 5%, or exempt if owned more than 2 years, Arts. 81(3), 82(1)(f.a) | Art. 13(1) |
| Shares in a property-rich company | Art. 104(1)(m), more than 50% of asset value from Georgian immovable property | See company-owned property | Land-rich clause, Art. 13(2)(a) in the UK treaty |
One point is open: the Georgian text of Art. 104(1)(l) (letter მ) adds "used for economic activity". How that applies to a private landlord is for an accountant to confirm; the 5% rates for residential rent and flat sale gains sit in Art. 81, and Art. 104(1)(r) adds other income from activity in Georgia.
Where two countries both claim a person as resident, a tie-breaker decides; Art. 4(2) of the UK treaty runs through permanent home, centre of vital interests, habitual abode, nationality and mutual agreement. See our entry on tax resident.
The Tax Code articles that connect the treaties
| Article | What it does | Who it helps |
|---|---|---|
| 2(7) | A ratified treaty in force overrides the Code | Anyone a treaty covers |
| 82(1)(u) | Exempts residents' non-Georgian-source income | Georgian tax residents |
| 124 | Credit for profit tax paid abroad, capped at the Georgian tax on that profit | Enterprises only |
| 125 | Leaves treaty claims and refunds to an order of the Minister of Finance | Non-residents |
| 129(2) | Corrects Georgian tax when a treaty partner adjusts a related-party price | Enterprises in a group |
| 70 | Lets the Revenue Service request bank data for another state's competent authority under a treaty | Tax authorities |
Article 124, "საქართველოს ფარგლებს გარეთ გადახდილი გადასახადის ჩათვლა" (credit of tax paid outside Georgia), names only an enterprise and only profit tax (wording of Law No 5092 of 13 May 2016). Individuals need no credit article: their foreign income is exempt.
Article 125 leads to Order No 633 of 28 December 2011. These points rest on its 2011 original text; it has been amended six times since, last on 5 December 2024, and we could not read the current wording. A Georgian payer applying a reduced rate at source reports on Form No 1, and a non-resident claims a refund on Form No 2; each needs a residence certificate from the recipient's country and a notarised Georgian translation. Art. 1(9) says the certificate needs no apostille or legalisation (see our entry on the apostille).
"May be taxed" and the ways relief is given
The property articles follow Articles 6 and 13(1) of the OECD model. Art. 6(1) of the UK treaty says income from immovable property "situated in the other Contracting State may be taxed in that other State"; Art. 6(3) includes letting, and Art. 13(1) uses the same words for sale gains. That is permission, not exclusivity: Georgia taxes first, and the home country gives relief under the elimination article, Art. 23.
| Method | How it works | Example |
|---|---|---|
| Credit | Home tax minus the Georgian tax, up to the home tax on that income | Most treaties; the UK under Art. 23 |
| Exemption with progression | Georgian income untaxed at home but counted to set the rate on other income | Germany, for Georgian real estate income and gains |
| Lower tax at source | The treaty limits what Georgia may charge | UAE: Georgian tax on property gains halved, for UAE nationals only |
Under credit, the total ends up near the higher of the two taxes, not their sum. Country terms are in our guide to Georgia's double taxation treaties, and the Israeli, Gulf and Egyptian treaties also appear in our Batumi guides for the Jewish community and Arab families.
The OECD multilateral instrument (MLI), ratified on 27 December 2018 and in force for Georgia since 1 July 2019, modifies 34 of the 58 agreements without renegotiation, the ministry says, and adds a principal purpose test.
Treaty cards, certificates and receipts: the term on paper
- The ministry's treaty card. Only 32 of 58 cards print an in-force date; the other 26, Israel and the UK among them, show a "DTA" link instead, sometimes "Protocol", so their dates come from the treaty texts. The 26 "MLI Synthesised text" links do not match the 34 modified treaties.
- The rate table. On 2 November 2026 the Georgian page showed, for the UK, dividends 0% or 15%, interest and royalties 0%; for Israel, dividends 0% or 5%, interest 5%, royalties 0%.
- A Georgian residence certificate. A Revenue Service sample reads "Revenue Service certifies that ... Is (was) tax resident of GEORGIA in [year] Year". Free in 20 working days, GEL 50 in 5, GEL 100 in 1.
- A foreign certificate and Form No 2. A non-resident's refund claim in Georgia under the 2011 original of Order 633, with a notarised translation.
- Proof of Georgian tax. The sale return (form No II-04², by the 15th of the next month) or the annual return (before 1 April), the rs.ge payment record, and a company tenant's record of any 5% withheld from rent.
We did not check listings for "no double taxation" claims; Georgian tax applies whatever the owner's residence.
Worked example: one flat, a treaty, the 2-year line and no treaty
The official example in the Minister of Finance's Instruction 996 (Art. 33-3) is a flat bought for GEL 100,000 and sold for GEL 120,000: a gain of GEL 20,000 and Georgian tax at 5%, GEL 1,000. The home-country lines below are our calculation, simplified on purpose.
| Case | Georgian tax | Home tax before relief | Relief | Total |
|---|---|---|---|---|
| UK resident, sold within 2 years | GEL 1,000 | GEL 4,800 (24%) | Credit GEL 1,000 | GEL 4,800 |
| UK resident, owned more than 2 years | GEL 0 | GEL 4,800 | Nothing to credit | GEL 4,800 |
| Russian resident, rent | 5% of rent | 13% or more | None, no treaty | at least 18% |
Case one: GEL 1,000 in Georgia plus GEL 3,800 in the UK, the higher rate rather than 5% plus 24%. Case two: Georgia exempts the gain (Art. 82(1)(f.a)), so there is nothing to credit and the exemption saves nothing; Germany, which exempts such gains, would differ. Case three is real double taxation: Russia has no treaty, taxes residents at 13% to 22% and gives no credit without a treaty (Russian Tax Code Art. 232).
We ignore the UK annual exempt amount of GBP 3,000, the 18% UK rate, currency conversion, Russian rates above 13% and any deductions; this is illustration, not advice. The Georgian side is in our entries on capital gains tax and rental income tax.
Not the same thing: economic double taxation, double non-taxation and other agreements
| Term | Meaning | Fixed by a tax treaty? |
|---|---|---|
| Juridical double taxation | One person taxed by two states on one income | Yes, by the elimination article |
| Economic double taxation | One profit taxed in two hands: a property company's 15% profit tax on distribution plus 5% dividend withholding, about 19.25% | Mostly not |
| Double non-taxation | A gain exempt in Georgia after 2 years and exempt in a home country that uses exemption | No; it is the result of two rule sets combining |
| Georgian domestic reliefs | The 2-year sale exemption, the 5% rates, the foreign-source exemption | Not treaty relief; they apply anyway |
Nor are these tax treaties: the Apostille Convention, which certifies documents; the CRS agreement, joined in November 2022, which moves bank data between tax authorities; and bilateral investment treaties.
Double taxation in five languages
| Language | Double taxation | Treaty on its avoidance |
|---|---|---|
| Georgian | ორმაგი დაბეგვრა | ორმაგი დაბეგვრის თავიდან აცილების შესახებ შეთანხმება |
| English | double taxation | double taxation treaty |
| Russian | двойное налогообложение | соглашение об избежании двойного налогообложения |
| Hebrew | כפל מס | אמנה למניעת כפל מס |
| Arabic | الازدواج الضريبي | اتفاقية تجنب الازدواج الضريبي |
Georgian legal texts use the full form above; we could not confirm the form used in bank documents.
Misreadings that cost owners money
- "With a treaty I pay once, at the lower rate." Under credit you pay about the higher of the two taxes, split between two countries.
- Reading "may be taxed" as "taxed only". The home country keeps its own right.
- Assuming a Georgian exemption travels home. A credit-method country may tax all of it.
- Counting the United States or Russia as treaty partners. Russia has no treaty; the IRS applies the 1973 US-USSR treaty to Georgia.
- Throwing away the Georgian return. Without it and the rs.ge payment record, the home office has nothing to credit.
To be added by the team: scans to add: a redacted residence certificate; a screenshot of one ministry treaty card; the current Form No 2 once confirmed; a redacted rs.ge payment record.
Dealing with double taxation on a Georgian flat step by step
Fix your residence
Know which country treats you as resident, and whether both do.
Find the treaty
Check the ministry list; no treaty means no duty to relieve.
Read Articles 6, 13 and 23
Rent, gains and the relief method, plus any MLI text.
Pay and file in Georgia
Georgian tax comes first.
Keep the proof
Return, rs.ge payment record and any withholding record.
Claim relief at home
Credit or exemption on your home return, with an adviser.
Frequently asked questions
What is double taxation?
The same income taxed by two states for the same period.
How many treaties against double taxation are in force?
The Ministry of Finance lists 58 partner countries.
Does a treaty override the Tax Code?
Yes, under Art. 2(7), once ratified and in force.
Who taxes my Georgian rent first?
Georgia, at 5% on residential rent (Art. 81(2)).
Does Georgia credit an individual's foreign tax?
No. Art. 124 is for enterprises; residents' foreign income is exempt (Art. 82(1)(u)).
How does a non-resident claim a treaty rate?
Under Order No 633. In its 2011 original text, the Georgian payer uses Form No 1 for a reduced rate at source and the non-resident uses Form No 2 for a refund, each with a foreign residence certificate.
Is there a treaty with Russia or the US?
Not with Russia. The IRS applies the 1973 US-USSR treaty to Georgia.
What is the MLI?
An OECD convention, ratified by Georgia on 27 December 2018, that modifies 34 of its 58 treaties.
Sources
- Tax Code of Georgia, Georgian consolidated text, publication 247 (accessed 2 November 2026)
- Order No 633 of the Minister of Finance, original text of 28 December 2011 (accessed 2 November 2026)
- Double taxation treaties, Ministry of Finance of Georgia (accessed 2 November 2026)
- Treaty list and rate table, Georgian page, Ministry of Finance of Georgia (accessed 2 November 2026)
- UK-Georgia double taxation treaty, SI 2004/3325 (accessed 2 November 2026)
- Sample Georgian residence certificate, Paragraf (accessed 2 November 2026)
- Instruction on tax administration, Minister of Finance Order No 996, Art. 33-3
- List of tax treaties, US Internal Revenue Service
- Tax on foreign income, GOV.UK
Change log
- - Glossary entry published from the Tax Code of Georgia, Order No 633, the Ministry of Finance of Georgia, the UK-Georgia treaty, Instruction 996, a Revenue Service certificate sample, the IRS and GOV.UK.