Georgia Transfer Pricing Documentation Requirements
Georgia requires transfer pricing documentation for controlled transactions, produced within 30 days of a request, with a formal Master File and Local File anticipated. Preparing the documentation shifts the burden of proof to the tax authority, and there is no specific penalty for its absence beyond the general tax rules.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
TP documentation Required | Taxpayers with controlled transactions | On request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | KA / EN | General tax penalties (50% of underreported tax) |
Master File Anticipated
Anticipated | Anticipated under developing OECD-aligned rules | Not yet in force | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. | — | Not yet in force |
Local File Anticipated
Anticipated | Anticipated under developing OECD-aligned rules | Not yet in force | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. | — | Not yet in force |
CbC report Required | Group revenue ≥ EUR 750m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
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Scope of the documentation obligation
A Georgian taxpayer with controlled transactions is expected to hold transfer pricing documentation supporting the arm’s length nature of its pricing, produced within 30 days of a request. A formal Master File and Local File structure is anticipated as the rules develop toward the OECD model, but the operative obligation is the documentation described here, so the formal files are presented as anticipated rather than current. Any transfer pricing adjustment made by the taxpayer must be reflected in the monthly corporate income tax return.
Distinctive features of the Georgian regime
The defining feature of the Georgian regime is the burden-of-proof effect of documentation. Preparing the documentation shifts the burden of proof onto the Revenue Service to show that the controlled transactions do not accord with the market principle, so the documentation operates as a positive evidential protection rather than only a compliance formality. There is no specific penalty for the absence of documentation; instead, the general tax penalties apply, including a penalty of 50 percent of any underreported tax. Aggregation is not preferred, with individual testing the expected approach.
Benchmarking and comparables
Foreign comparables are acceptable given the lack of information sources within Georgia, provided the impact of geographic and other differences is analysed and comparability adjustments are made. A taxpayer is generally expected to use benchmarks relevant to the financial year of the controlled transaction, although where the required information is unavailable it may use data from up to four years before the tested transaction. A fresh benchmarking search or financial update is required each year, except that taxpayers with turnover below about GEL 8 million may update the analysis every third year where there have been no material changes. The general limitation period is three years, capable of a one-year extension in defined circumstances.
Frequently asked questions
What is the effect of preparing transfer pricing documentation in Georgia?
It shifts the burden of proof onto the Revenue Service to show that the controlled transactions do not accord with the market principle. There is no specific penalty for the absence of documentation, but general tax penalties of 50 percent of underreported tax can apply.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.