For the purpose of approximation tax legislation with EU VAT Directive (2006/112/EC), amendments were made to tax code as well as implementing provisions of VAT were reestablished.

As a result of the reform, all the simplified procedures that previously existed regarding VAT are maintained.

Also:

• The list of services, provision of which outside Georgia will not be subject to VAT taxation, is expanding;
• List of transactions related to transportation of good and exempted from VAT with the right of deduction will be expanded and specified;
• Temporary admission of goods is no longer deemed as a taxable operation;
• Ancillary services and supply of goods directly related to medical and educational activities will be exempted from taxation;
• Medical, educational and other social activities carried out by organization to raise funds, will not be taxed;
• Transfer of sample of goods or gift of small value will not be taxed;
• Regulations related to VAT taxation of transfer of goods free of charge will be simplified;
• VAT taxpayer natural person will not be limited to use a cash method of accounting.

New reform of VAT will improve the process of tax administration. It will also establish the best EU practice supporting the cooperation between registered entrepreneurs of Georgia and EU. Moreover, approximation of Georgian and European VAT legislation will improve investment environment, while number of disputes will reduce as a result of simplification of tax obligations.