Cryptocurrency in Georgia: A Crypto-Friendly Destination with Tax Advantages
Georgia has emerged as one of the top crypto-friendly countries, witnessing a growing adoption of cryptocurrencies in everyday transactions. With no legislative restrictions and a supportive regulatory environment, Georgia offers a unique opportunity for investors and individuals looking to leverage the benefits of cryptocurrency. This article explores the legality of cryptocurrency in Georgia, the advantages of trading crypto as an individual, and the tax implications for trading within a legal entity.
Legality of Cryptocurrency in Georgia:
1. No Legal Tender: The Georgian Lari (GEL) is the only legal currency for transactions in Georgia. However, the National Bank of Georgia does not currently have regulations in place that prevent the use of cryptocurrency as a form of barter exchange.
2. Safe and Legal Transactions: Owning and making transactions with cryptocurrencies in Georgia are legal and considered safe, with minimal red tape. The country aims to capitalize on this opportunity by providing a conducive environment for crypto-related activities.
Trading Cryptocurrency in Georgia, Tbilisi as an Individual:
1. 0% Income Tax: Individuals trading cryptocurrencies in Georgia benefit from a 0% income tax rate. This means that there is no tax obligation on profits when liquidating crypto assets.
2. Favourable Capital Gains Tax: According to the Georgian Ministry of Finance, cryptocurrency trading income is not considered "Georgia sourced," allowing it to fall under the 0% capital gains tax category. This further reduces the tax burden for individuals trading and liquidating crypto assets.
Trading Cryptocurrency within a Legal Entity based in Georgia, Tbilisi:
1. Corporate Profits Tax: If cryptocurrency trading is conducted within a legal entity registered in Georgia, such as an LLC, profits related to this activity are subject to a 15% Corporate Profit Tax.
2. Dividend Tax: Additionally, dividends distributed from the profits of a legal entity engaged in cryptocurrency trading are subject to a 5% Dividend Tax.
3. Tax-Free Retained Profits: Any profits retained within the company or reinvested are tax-free in Georgia, providing significant tax breaks for businesses operating in the crypto space.
Georgia has positioned itself as a leading crypto-friendly destination, embracing the use of cryptocurrencies and providing a supportive regulatory framework. With no legislative restrictions on cryptocurrency trading and favourable tax policies, individuals and businesses can benefit from the advantages of owning and trading cryptocurrencies in Georgia. The country's crypto-friendly approach, combined with its safe and legal environment, makes it an attractive destination for those looking to engage in crypto-related activities.