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As of today, legislative changes introducing tax incentives for innovative startups, as well as small and medium-sized innovative companies, have come into force in Georgia.
The amendments are part of the Law on Innovations and aim to stimulate innovative activity and foster the development of the country’s technology sector.
What changes for startups?
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Startups that obtain official status will be exempt from income tax on employee salaries during the first three years.
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At later stages, the tax rate will gradually increase — from 5% to 10%.
Benefits for small and medium-sized innovative companies
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Such companies will be able to reduce their taxable base by the amount of expenses spent on research and development (R&D).
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In case of reinvested profits, they will also benefit from additional tax preferences.
Research and development service providers
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Companies providing R&D services will be subject to a unified 5% tax rate on both profit tax and income tax from employee salaries.
According to the government, these changes are designed to strengthen the innovative ecosystem, support startup growth, and accelerate the development of Georgia’s technology sector.
