Reverse tax liability (reverse charge)
This is how the reverse charge procedure works in Georgia for cross-border services. Sample invoices, requirements and practical tips.
definition
Reverse VAT is a tax procedure in which it is not the service provider but the service recipient who pays the sales tax. For Georgian companies that provide B2B services to foreign clients, this means: no obligation to collect or pay sales tax.
How it works
Standard sales tax
- Provider charges service fee + 18% VAT
- Client pays the total amount
- Provider transfers the VAT to the tax office
Reverse Charge
- Provider only charges the service fee (no VAT)
- Invoice contains the note 'Tax liability of the beneficiary of the beneficiary'
- Client declares and pays VAT in their own country
- Georgian company has no VAT obligation
prerequisites
- Client is based outside Georgia (B2B)
- Client has a VAT identification number
- Performance is digital or intellectual
- Georgian company is registered for VAT
Invoice example
INVOICE #2026-001
To: Client GmbH (USt-IdNr.: DE123456789)
Service: web development
Tax liability of the beneficiary in accordance with Article 196 of EU Directive 2006/112/EC
Example: German company
Development of a tailor-made CRM system for a German GmbH (VAT number: DE123456789), invoice amount: €25,000.
- Invoice: €25,000 (no VAT shown)
- German company declares 19% VAT (€4,750) in Germany
- Georgian company receives full amount of €25,000
- No VAT obligation for the Georgian company
Frequently asked questions
Source: Georgia Business & Technology Glossary by Del-Ops Technology & Consulting Team. Last Updated: February 2026.